IIROC panel condemn respondent's conduct and lack of remorse for taking advantage of widowed senior
An advisor has been fined $100,000 and banned for two years after borrowing more than $156,000 from an 81-year-old widowed client.
An IIROC panel found that Michael Francis O’Brien, who was registered at RBC Dominion Securities at the time of the violations, engaged in personal financial dealings with a client between May and September 2017 without the knowledge or approval of his firm. Between September 2017 and April 2018, he also admitted making misleading representations regarding client dealings.
O'Brien had been the financial advisor for the client for 15 years. However, the misconduct happened after another employee, who was helping the elderly client with her day-to-day affairs, was terminated. O’Brien then borrowed the money over a four-month period via a number of means, including: a series of online electronic payments to the respondent’s various credit cards and lines of credit and through use of the client’s credit card as a secondary card holder. Some of the money went towards paying off his mother-in-law’s credit, while one payment totalling $4,985.78 was made to O'Brien's Diners Club account.
The borrowings from the client’s personal bank account were detected as suspicious activity by the National Fraud Detection Group of Royal Bank of Canada, prompting more scrutiny. IIROC concluded: “The respondent failed to act in a forthcoming and candid manner, and made false and misleading representations during investigations by both his firm and IIROC Enforcement Staff.”
During the investigation O'Brien also falsely claimed he was the client’s power of attorney and was "evasive and not forthcoming". In conclusion, the panel gave a stark assessment of the respondent’s conduct.
It said: “The respondent’s failure to express any recognition of his responsibilities for his conduct … further emphasizes that he still does not recognize or feel any remorse for compounding his initial breach with a sustained intentional strategy of making false and misleading representations.”
Francis must also pay costs of $20,000 and will be ineligible for reinstatement until he has rewritten and passed the CPH examination following conclusion of the suspension period. He will also be subject to strict supervision for the first 18 months upon re-entry to the investment industry.
