A Federal Court case has brought to light a now-banned practice known as “account churning” among Canadian bank employees incentivized by commission-based pay.

Evidence emerged during a recent case about the misconduct that involved bank employees engaging in excessive trading to generate fees, as first covered by Blacklock’s Reporter on Feb. 29. Account churning came under scrutiny after Parliament passed legislation to prohibit the practice in 2018.

Lawyers for the Royal Bank of Canada in court described the actions as “fundamentally dishonest and contrary to the Royal Bank’s Code of Conduct.” The gravity of the misconduct was documented in records filed that were linked to a 2018 dismissal of a high-earning financial planner.

The woman, a licensed mutual fund manager, was found to have engaged in a pattern of unauthorized transactions. She converted existing client investments into cash only to reinvest them, generating substantial fees and commissions.

Posted in

Iron Will

Leave a Comment

You must be logged in to post a comment.