Calgary (April 9, 2020) – A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) fined and suspended Calgary investment advisor Michael Francis O’Brien on March 11. He engaged in personal financial dealings with an 81-year-old widowed client without his employer’s knowledge or approval and misled investigators. Between May and September 2017, he borrowed $156,000 from her, while he was a registered representative of RBC Dominion Securities Inc. and Raymond James Ltd. The IIROC panel imposed a two-year suspension and ordered him to pay a $100,000 fine as well as cost in the amount of $20,000.
The Investment Industry Regulatory Organization of Canada (IIROC) banned Calgary-based advisor, Michael Francis O’Brien, after a penalty hearing on March 11. According to the enforcement notice, the hearing panel found that he engaged in undisclosed personal financial dealings with an elderly client in 2017 and misled investigators.
O’Brien violated IIROC rules
In December 2019, a hearing panel of the IIROC found that O’Brien borrowed from an 81-year-old widowed client over four months without his employer’s knowledge or approval.
The IIROC oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees. O’Brien violated IIROC rules by engaging in undisclosed personal financial dealings with his client.
For 15 years, he had been the financial advisor of the widow. The misconduct occurred while he was a registered representative with the Calgary branches of RBC Dominion Securities Inc. and Raymond James Ltd.
Borrowing a significant amount of money from an elderly client
Between May and September 2017, O’Brien borrowed $156,000 from his client via several means. The IIROC reports that he made a series of online electronic payments to the respondent’s various credit cards, lines of credit as well as used the client’s credit card as a secondary cardholder.
Reportedly, the former investment advisor used some of the money to pay off his mother-in-law’s credit and $4,985.78 were directed to his personal Diners Club account. Eventually, the National Fraud Detection Group of RBC detected the borrowings from the client’s bank account as suspicious activity.
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IIROC fined and suspended O’Brien
In January 2018, the national self-regulatory organization started its investigation regarding O’Brien’s case. Meanwhile, he made misleading representations to the IIROC staff during the investigations as well as to his client’s bank.
As a result of a hearing panel of the IIROC on March 11, O’Brien was fined $100,000 and suspended for two years. Additionally, he has to pay $20,000. Before returning to work, he will have to successfully rewrite the IIROC’s Conduct and Practices Handbook exam and he will be under close supervision for 18 months upon re-entry.
The IIROC panel condemned O’Brien’s behavior and lack of remorse for taking advantage of a widowed senior and ultimately found that ‘a two-year suspension together with a $100,000 fine is necessary to bring home to this respondent the very serious nature of his misconduct and to demonstrate that false statements, repeated acts of evasion and misrepresentation […] cause harm to the reputation of the industry and must be deterred.’
O’Brien repaid the borrowed money to the client and was terminated by RBC.
