Regulator sanctions representative for routing client funds through personal accounts in off‑book cash swaps
A registered representative who routed roughly $647,000 of client-related funds through her own bank accounts has received a suspension and a $75,000 fine.
A Canadian Investment Regulatory Organization hearing panel on January 20 accepted a settlement agreement, with sanctions, between Enforcement Staff and Wei (Wendy) Seto, following a hearing held under the Investment Dealer and Partially Consolidated Rules.
According to the settlement agreement, Seto admitted that between December 2019 and April 2021 she engaged in personal financial dealings with five Dealer Member clients.
This conduct was contrary to Dealer Member Rule 43, which prohibits registered representatives from directly or indirectly engaging in personal financial dealings with clients.
Seto’s conduct included providing clients with Canadian physical cash, or arranging for her spouse to provide Canadian physical cash, in exchange for cheques, bank drafts, or US monies, then depositing those funds into bank accounts she controlled and, in some instances, transferring the monies to her own investment accounts.
She also accepted electronic transfers from clients into bank accounts she controlled, accepted clients’ Canadian physical cash and then deposited her own monies into their investment accounts, and sent electronic transfers of her own monies to clients.
The subject transactions, according to the settlement, ranged from $3,300 to $145,000 and totalled about $544,871 and US$76,005 (approximately $102,428.11), for an overall amount of roughly $647,299.11.
Under the terms of the settlement, Seto agreed to a one‑month suspension starting on the date of approval of the settlement, a fine of $75,000, and costs of $5,000, which she must pay upon acceptance by the hearing panel unless otherwise agreed with Enforcement Staff.
Enforcement Staff will not initiate further action related to the agreed facts and contraventions if she complies, but may bring proceedings under Investment Dealer Rule 8200 if she fails to do so.
CIRO noted that Seto has no prior disciplinary history, that no clients have complained about the transactions described in the settlement, and that there is no evidence of client losses or financial benefit to Seto from the dealings.
The settlement also records that Seto states she did not initiate the transactions and that, by resolving the matter, she has saved CIRO the time and expense of a contested hearing.
At all material times, Seto conducted business as an RR at RBC Dominion Securities Inc. in the Toronto, Ontario area.
She has been employed in a registered capacity at CIBC World Markets Inc. since March 1, 2024 and has been under enhanced close supervision since she started there.
