Regulatory panel imposes a lifetime ban and hefty fine on a rep for unauthorized client loans
The Canadian Investment Regulatory Organization (CIRO) has enforced a significant disciplinary action by permanently banning former mutual fund representative Omadai (Amy) Sukhai, after a regulatory hearing panel found her guilty of borrowing money from a client.
CIRO fined Sukhai $213,509 and mandated $10,000 in costs for violating self-regulatory rules, stemming from her time at PFSL Investments Canada Ltd., Toronto. Findings from a disciplinary hearing revealed Sukhai's unauthorized borrowing from a client starting in 2017, totaling nearly $140,000.
This client, identified as a retired widower, had to redeem funds from his Registered Retirement Savings Plan (RRSP)—incurring deferred sales charges and taxes—and even took a cash advance from a credit card to facilitate the loans to Sukhai.
According to the panel, “[Sukhai] deposited some or all of the amounts that she obtained from [the] client into her personal bank accounts, and used the monies to pay her personal expenses,” without repaying the loans.
CIRO's allegations highlighted that the borrowing began in 2017, with Sukhai receiving a series of payments that ultimately totaled almost $140,000.
The client, significantly impacted by Sukhai's actions, faced financial hardship as he was compelled to pay deferred sales charges and taxes on the redemptions from his RRSP, aside from taking a cash advance on a credit card to lend money to Sukhai.
Upon discovery of the misconduct in May 2021, Sukhai's association with PFSL Investments Canada Ltd. was terminated. The regulatory panel identified a clear conflict of interest in Sukhai's actions, which were not disclosed to her dealer, failing to safeguard the client's best interests.
The hearing's evidence conclusively showed Sukhai's breach of CIRO rules and her dealer member's policies, which strictly prohibit borrowing from clients. Despite the client's repeated demands for reimbursement, Sukhai has not repaid any of the monies that she borrowed.
This disciplinary measure by CIRO underscores the organization's dedication to maintaining the integrity of the financial services sector and safeguarding investors against malpractices.
The permanent banishment of Sukhai from the industry, coupled with the imposition of a hefty fine and costs, serves as a stern warning to other professionals in the field about the severe consequences of flouting regulatory standards and ethical norms.
