Former dealing representative violated client's trust by changing contact details to conceal unauthorized transactions, says MFDA
The Mutual Fund Dealers Association of Canada (MFDA) has imposed a permanent prohibition on Omar Enrique Rojas Diaz, a former Ontario-based dealing representative who used a client’s line of credit without her knowledge.
In a Decision and Reasons document dated January 29, the MFDA said from December 9, 2013 to July 17, 2018, Diaz was registered as a dealing representative in Ontario with Royal Mutual Funds Inc. He was also an employee of Royal Bank of Canada (RBC), which is affiliated with Royal Mutual Funds.
In or about 2013, Diaz met MC, a woman who attended the same church he did and who subsequently became his client. In early 2017, she was pre-approved by the bank to open a line of credit amounting to $10,000. While she was not interested, Diaz encouraged and ultimately convinced her to do so.
That September, Diaz reportedly altered MC’s contact information with Royal Mutual Funds, replacing it with fictitious details without her knowledge. From then until June 2018, the MFDA said, he made 30 withdrawals ranging from $200 to $5100. He also made 30 increases to the credit limit on her line of credit; he paid the monthly interest charges, ensuring the account never went into default.
“At all material times, client MC was unaware that her line of credit was being accessed or used, and had not authorized anyone, including the Respondent, to access or use her line of credit,” the MFDA said.
RBC discovered Diaz’s actions in July 2018, firing him on July 17. Upon further investigation, Royal Mutual Funds found no evidence of additional misconduct impacting other clients, and no other client complaints relating to Diaz have been filed with the firm or the MFDA.
There was also no evidence that Diaz used funds from the line of credit to support a lavish lifestyle. In a hearing held on December 14, 2020, he told an MFDA hearing panel that he and his wife had experienced financial difficulties, and he needed money to pay his bills.
“The line between when the Respondent was acting as a dealing representative and when he was acting as an employee of the Bank was blurred,” the MFDA said. “What is clear, however is that the Respondent breached the trust his client placed in him as her dealing representative and as her Bank representative.”
