A former Vernon mutual funds salesperson has been given a permanent lifetime ban by the B.C. Securities Commission (BCSC) for fraud and illegally distributing securities.
A BCSC panel found that Robert Bruce Rush advised an investor that she could re-invest her locked-in pension in higher return investments and do so on a tax-free basis.
The investor, who was a former client of Rush when he was registered to sell mutual funds, followed his advice and entered into a series of transactions that resulted in her borrowing against her pensions and receiving the cash proceeds.
Rush told the investor about certain investments being offered by a third party and offered through an investment company, one of which was a foreign exchange trading account.
The investor agreed to make an investment in a foreign exchange trading account and wrote a cheque for $73,200 to Breakthrough Financial Inc., a company for which Rush was the sole director and officer.
The panel found Rush and Breakthrough Financial Inc. committed fraud when Rush told the investor he would forward the funds to the investment company, but he didn’t do this.
An investigation revealed the funds were used by Rush to pay personal expenses.
The investor received $12,790 as a purported return on her investment, but the rest of the funds have been lost.
Rush must pay BCSC $60,410, the amount determined to be the difference between the monies invested and the purported returns to the investor.
The panel also ordered that Rush pay an administrative penalty of $200,000.
In 2014, the Mutual Fund Dealers Association of Canada (MFDA) found that Rush – formerly of Sun Life – engaged in securities-related business not pertaining to Sun Life by recommending, referring, selling or facilitating the sale of securities to two Shuswap clients, possibly two other clients and 11 other individuals outside of Sun Life.
He was also found to be gainfully employed in an occupation that was not disclosed to and approved by Sun Life, failed to comply with Sun Life’s policies and procedures with respect to engaging in outside business activities and failed to cooperate with an investigation.
Rush was permanently prohibited from conducting securities-related business in any capacity while in the employ or associated with any MDFA member.
He was fined $90,000 and ordered to pay costs of $10,000 associated with the investigation as well as the hearings.