Gary Ng slapped with $5M fine, lifetime ban

Hey there, time traveller!
This article was published 01/06/2022 (1382 days ago), so information in it may no longer be current.

Gary Ng, the former Winnipeg investment adviser and owner of a Winnipeg wealth management firm, has received a $5 million penalty from the Investment Industry Regulatory Organization of Canada (IIROC), the largest penalty it is able to hand out.

IIROC alleged that Ng falsified financial information in order to secure loans that eventually allowed him to acquire Vancouver-based PI Financial for $100 million in 2018.

IIROC also “charged” Ng with failing to cooperate with the regulator’s enforcement staff conducting the investigation, a contravention to the rules of registration.

In addition, IIROC also ordered him to pay $194,000 to cover IIROC’s costs to investigate the matter and is barred for life from being eligible to register as an official in any capacity with any IIROC-regulated entity.

Ng was not present at the hearing that were held in Toronto last week but was represented by counsel.

According to the IIROC statement of allegations, in 2018 when Ng was the principal of a small Winnipeg firm called Chippingham Financial Group Limited he acquired PI Financial financing it via two loans for $80 million and $20 million that Ng personally guaranteed as well as providing some Chippingham accounts as collateral.

But Ng did not actually own or have control over the securities accounts pledged as collateral but falsified documents to make it look like he did.

He subsequently orchestrated two other loans totalling $72 million also based on falsified collateral, according to IIROC.

Specifically, IIROC said he vastly overstated the value of assets in the accounts; altered the securities account statements of two unrelated Chippingham and PI Financial clients by changing the clients’ names to his own name in order to make it appear that those clients’ assets were owned by him; and created fictitious account statements, summaries and screen capture images to make it appear that he held millions of dollars in financial assets with Chippingham and PI Financial when in reality those accounts and the claimed assets did not exist.

IIROC became aware of the fraudulent activities in January, 2020 after officials from PI Financial notified them. Ng resigned in February 2020.

Ng’s colleague, Donald Warren Metcalfe, faces similar allegations, but his matter has not been heard yet by an IIROC penalty hearing,

The regulator said that in the course of its investigation it has not found any evidence of any client losses.

In an interview with the Free Press in 2018 just after the PI Financial Acquisition, Ng, 38, acknowledged that it may have looked like he came out of nowhere to buy PI Financial which, at the time has a staff of 300 and was managing about $4.5 billion in assets.

But the son of Hong Kong immigrants scoffed at the suggestion.

“I didn’t come from money,” he said. “I’ve worked very hard for a long time and have taken substantial risks. But I’m still the same guy. I’ve just got a nicer watch now.”

About a year later he was forced to resign.

An IIROC official said Ng has 30 days in which to appeal the decision.

While IIROC does not have the power to garnishee wages or put liens on properties it can register the ruling as a judgment of the court and then go through the process of determining if Ng has assets that could be seized.

Ng is also facing criminal charges.

In January, RCMP charged Ng with one count of fraud over $5,000 and one count of laundering the proceeds of crime.

The RCMP said the fraud charge stems from an RCMP investigation into allegations that Ng secured loans and credit from a number of victims/lenders by presenting false collateral in the applications for the loans and credit.

The second charge stems from the uses of the loans and credit Ng obtained.

martin.cash@freepress.mb.cs