Sungsoo (Steve) Lee will also have to pay a total $40,000 in fine and costs
A former dealing representative operating in the Burnaby, BC, area has been given a permanent ban, and ordered to pay a $35,000 fine and $5,000 costs by the Canadian Investment Regulatory Organization (CIRO).
Sungsoo (Steve) Lee had been a dealing representative for BMO Investments for 16 years until the firm terminated his registration in December 2018 and reported allegations relating to Lee to the Mutual Fund Dealers Association, which merged with IIROC in 2023 to form the New SRO (now CIRO).
MFDA staff began an investigation into whether Lee has instructed other Approved Persons to open client accounts without ascertaining if information was correct or if transactions made were suitable for the clients and authorized by them.
Allegations also included the use of pre-signed forms and concerns around compliance with regulatory requirements and the policies and procedures of BMO Investments.
Despite several meetings being arranged between MFDA staff and Lee, they were not attended with Lee citing medical grounds. While doctors’ notes were provided, the regulator was not satisfied with the level of information and how it proved that Lee could not attend interviews.
While Lee offered to answer MFDA staff questions in writing, the regulator said this did not constitute cooperation with its investigation and that it could not determine the full nature of the conduct under investigation.
Lee stated that he had received legal advice relating to the matter but that his obligations to cooperate were not made clear. The regulator asserted that it was his duty to know his obligations and comply with them.
At a settlement hearing held on March 20, 2023, a hearing panel accepted a settlement agreement between CIRO's Enforcement Staff and Lee.
In its reasons for decision published last month the hearing panel confirmed the sanctions imposed on Sungsoo (Steve) Lee:
- a permanent prohibition from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member, pursuant to section 24.1.1(e) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 7.4.1.1(e));
- a fine in the amount of $35,000 ("Fine");
- costs in the amount of $5,000 ("Costs");
- payment of the Fine and Costs shall be made in instalments as follows:
- $10,000 (Fine) on March 20, 2023;
- $5,000 (Costs) on March 20, 2023; and
- $25,000 (Fine) on or before September 23, 2023.
