- CIRO permanently banned former TD Waterhouse rep Omer Naek for misappropriating client funds in Quebbec from May 2020 to August 2021.
- He opened unauthorized bank accounts in clients namesincluding one deceasedand diverted about CAD 204,000 and USD 15,000 for personal debts and a home-related payment.
- Sanctions include a CAD 100,000 fine, about CAD 59,151 disgorgement, CAD 5,000 costs, and a permanent prohibition from registration.
- An alleged failure-to-cooperate breach was withdrawn as part of the settlement.
Read More
The case of Omer Naek highlights serious governance, ethics, and oversight failures with implications across the investment industry in Canada.
Key factual timeline: While registered with TD Waterhouse Canada Inc. in Québec (active 2016 to Nov 2021), Naek is alleged to have made unauthorized transfers and misappropriated client funds between May 2020 and August 2021. ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
The mechanism of misappropriation was layered: opening bank accounts in clients’ names—one client being deceased—channeling funds from clients’ brokerage and bank accounts into those fake accounts, then making payments for his personal debts, including one to a contractor from whom he was buying a home. ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
Nature of clients: Vulnerable individuals, including elderly married couple, and at least one client who was deceased at time of transactions. These facts aggravate the misconduct; CIRO sees misappropriation involving vulnerable or deceased clients as particularly egregious. ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
The regulatory response included negotiated admissions; a hearing panel found Naek liable, imposed sanctions including a permanent ban, fine, disgorgement, and costs. Noteworthy: an allegation concerning failure to cooperate was dropped under the settlement. ([ciro.ca](https://www.ciro.ca/newsroom/publications/ciro-hearing-panel-issues-reasons-decision-matter-omer-naek?utm_source=openai))
Strategic implications: ‒ CIRO emphasizes investor protection, especially for vulnerable populations; permanent prohibition aims to deter similar abuses.
‒ The use of “fake accounts” and misuse of client identity—even post‐death—indicate weaknesses in account opening and monitoring controls.
‒ Dealer firms must improve due diligence, record audits, oversight for advisor trust limits, especially when advisors may have access to client bank and brokerage histories.
‒ Entities and investors alike will likely demand stronger proof of client identity, death verification, and audit trails for transfers and bank accounts.
Open questions:
- How did the unauthorized bank accounts pass internal controls at TD Waterhouse? Was there failure of supervision or fraud scope beyond one rep?
- What role did TD’s policies on power of attorney, death notification, and client identity verification play?
- What restitution (if any) clients received beyond disgorgement? Did TD or any insurer compensate victims?
- What systemic measures has CIRO or other regulators proposed to detect similar cases earlier?
Supporting Notes
- CIRO’s decision notice confirms that Naek was permanently prohibited, fined CAD 100,000, required to pay disgorgement of CAD 59,151 and costs of CAD 5,000. ([ciro.ca](https://www.ciro.ca/newsroom/publications/ciro-hearing-panel-issues-reasons-decision-matter-omer-naek?utm_source=openai))
- Violations occurred while Naek was registered with TD Waterhouse Canada Inc., in the Dollard‐des‐Ormeaux area in Québec. ([ciro.ca](https://www.ciro.ca/newsroom/publications/ciro-hearing-panel-issues-reasons-decision-matter-omer-naek?utm_source=openai))
- Misappropriation involved approx. CAD 204,000 and USD 15,000 between May 2020 and August 2021, via opening unauthorized bank accounts in clients’ names (including one deceased). ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
- One client’s estate: client “TDT” died March 6, 2020; account in name opened May 29, 2020; transfers of CAD 10,000, 20,000, 30,000 among dates; some withdrawals and a $20,000 bank draft to a contractor. ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
- Vulnerable married couple “GV and JL” born in 1929 & 1923; one had died Sept 11 2020; blank cheques used to pay contractor $55,000 CAD; further transfers totaling CAD 125,000 and USD 10,000 between 2020‐2021. ([wealthprofessional.ca](https://www.wealthprofessional.ca/news/industry-news/ciro-issues-permanent-ban-in-misappropriation-case/391370?utm_source=openai))
- Allegation that Naek failed to cooperate was dropped as part of settlement. ([advisor.ca](https://www.advisor.ca/industry-news/regulation/former-td-rep-sanctioned-for-misappropriation/?utm_source=openai))