Transaction types were changed to boost personal rewards
A former dealing representative operating in Dartmouth, Nova Scotia, has been fined $17,500 plus $5,000 in costs for conduct resulting in a conflict of interest.
Natalie Kiryak was employed by Scotia Securities, a Dealer Member of the Canadian Investment Regulatory Organization, between January 22, 2018, and April 6, 2020, when she resigned following disciplinary action by the firm.
The matter resulted from Kiryak’s conduct in the movement of client money between mutual funds of the same family, which she processed as withdrawals from one fund and purchase of another, rather than as switches, requesting clients give their permission for the transactions.
This was contrary to the firm’s policies and procedures which required its Approved Persons to avoid conflicts of interest and included guidance for switches. Withdrawals and purchase transactions were eligible for the firm’s performance credits, whereas switches were not.
Kiryak processed 20 transactions in respect of 15 clients as redemptions and purchases, rather than as switches between February and August 2019, including two following the firm’s bulletin requiring dealing reps to ensure that transactions of this nature were switches.
The firm’s investigation into dealing rep’s processing of switches identified Kiryak’s conduct which it determined cost clients a total of just over $1,980 and made the dealing rep $163 in performance credits, which the firm later reversed as well as compensating the clients involved.
Following a settlement hearing held on June 27, 2024 pursuant to the Mutual Fund Dealer Rules, a hearing panel of CIRO determined that Kiryak had engaged in conduct which gave rise to a conflict of interest which she failed to disclose to the Dealer Member, or ensure was addressed by the exercise of responsible business judgment influenced only by the best interests of the client; and failed to comply with the Dealer Member's policies and procedures with respect to the processing of trades as switches.
Natalie Kiryak is not currently registered in the securities industry in any capacity.
