A former rep who tried to mollify a couple of dissatisfied clients by providing them with falsified portfolio values has been sanctioned in a settlement with securities regulators.
Following a hearing, a panel of the Canadian Investment Regulatory Organization (CIRO) approved a settlement between staff of the self-regulatory organization and a former rep with RBC Dominion Securities Inc. in Toronto, Andrew David Munro.
According to the settlement, Munro admitted to violating CIRO rules by providing false portfolio information to two clients between May and November 2022, and by communicating with an associate, Sinziana Vornicu, via an unapproved communications method (private texting).
“Over time, two of [Munro’s] high net-worth clients expressed dissatisfaction with their investment returns,” the settlement noted — and, to retain those clients Munro “initiated a scheme where, with the assistance of Vornicu, clients would receive false portfolio values.”
While Munro managed clients’ portfolios and provided them with investment advice, Vornicu helped with client communications and documentation, executing trades and other administrative tasks, the settlement noted.
In those communications, the clients allegedly received reporting that inflated the market value of their investments, and in one instance, a client was provided with reporting that “misrepresented the names and quantities of certain securities that were held in that client’s accounts.”
For one client, falsified reporting resulted in overstating the value of their portfolio by between $1.1 million and more than $2.2 million. The other client received account statements that overstated their portfolio value by between $3.2 million and almost $7.5 million.
Under the settlement, Munro agreed to a $100,000 fine and a five-year registration suspension. He also agreed to pay $5,000 in costs.