N.L. investment advisor accused of funneling $775K in client cash to her personal account

·2 min read
A Newfoundland investment advisor allegedly had cheques drawn on client accounts, and then deposited them into her own personal bank account. (Shutterstock - image credit)
A Newfoundland investment advisor allegedly had cheques drawn on client accounts, and then deposited them into her own personal bank account. (Shutterstock - image credit)

A former Newfoundland investment advisor has been accused by the industry regulator of falsifying signatures and appropriating $775,000 from the accounts of six elderly clients over a 13-year period.

The Investment Industry Regulatory Organization of Canada (IIROC) said in a press release Friday that it is setting a date for the disciplinary hearing into the alleged conduct of Joan McCarthy.

IIROC is the national self-regulatory organization which oversees all investment dealers in the country.

McCarthy was employed by MD Management Limited at its St. John's branch from 2000 through 2019.

IIROC alleges that McCarthy got more than 160 cheques drawn on client accounts between 2006 and 2019, and then deposited them into her own personal bank account by altering their signatures.

McCarthy is accused of instructing head office to send the cheques directly to the St. John's branch by internal mail, and not to the clients' homes.

According to IIROC, she justified these requests to head office by saying her clients preferred to pick up the cheques from the branch themselves.

Once the cheques arrived, she allegedly told MD Management staff that she would deliver them to her clients' homes herself, contrary to company procedure.

"McCarthy would also forge her clients' signature on the cheque log to falsely demonstrate that she was delivering the cheques to her clients in person," IIROC noted in its statement of allegations.

"In reality, McCarthy was forging her clients' signatures on the cheques in order to deposit them in her personal bank account."

According to IIROC, McCarthy has not been employed with MD Management since March 2019, and has not worked for a regulated firm since.

In an email to CBC News, MD Management said "to respect privacy, we do not comment on active investigations."

No reply to enforcement staff's interview requests

McCarthy is accused of ghosting IIROC investigators, who began reaching out to her in late 2019, asking for documents and for her to answer questions.

She never did, according to the regulator, despite repeated attempts.

At one point, when a bailiff visited the McCarthy residence to serve documents, they found that it appeared uninhabited.

A few months later, in February 2020, McCarthy's lawyer refused to disclose her new home address, according to IIROC.

An initial appearance on the matter is scheduled for July.

The allegations against McCarthy have not yet been proven.

If the hearing panel ultimately finds that she committed those contraventions, a range of monetary penalties could apply.

That includes fines, and disgorgement of the amounts she obtained through her conduct.

Read more from CBC Newfoundland and Labrador