A hearing panel of the MFDA’s Central Regional Council has issued its decision and reasons in connection with penalty and costs submissions that took place on January 15, 2013.

The conduct phase of the hearing took place on October 12, 2012, after which the hearing panel issued its decision and reasons. This document was dated October 23, 2012, and the panel announced the allegations set out in the notice of hearing had been established.

The MFDA’s allegations—as set out in its decisions and reasons (misconduct) notice—were:

  • Allegation #1: In June 2011, the respondent falsified the signatures of clients WG and CD on a client account document, contrary to MFDA Rule 2.1.1.
  • Allegation #2: Commencing in September 2011, the respondent failed or refused to provide documents and information, and to attend on interview requested by the MFDA, during the course of an investigation, contrary to s. 22.1 of MFDA By-law No. 1.

In response, the MFDA says the respondent admitted at the hearing that he engaged in the misconduct in Allegation #1, saying, “We had been preparing a financial plan together and I had failed to obtain the signatures on the…agreement in time for the review of the plan.”

He added, “I had tried unsuccessfully to obtain their signatures prior to submitting the plan for review. As this would have negatively affected my performance review and my compensation with RBC, I falsified their signatures with the plan to replace the agreement with the proper signatures once I received them from the client.”

In the same document, the MFDA says he denied the second allegation, saying, “I did not fail to cooperate as all documentation that was sent out in regards to this matter [was] forwarded to an incorrect address. I did not update my address with the MFDA when I moved, as I no longer was licensed nor had any plans to resume a career selling mutual funds. When I received the documents in the spring of 2012 I contacted The MFDA, had my address updated and have cooperated with the proceedings.”

Based on the MFDA’s findings, it issued a permanent prohibition from conducting securities-related business in any capacity while in the employ of or associated with any MFDA member. It also issued a fine in the amount of $50,000 and costs in the amount of $5,000.

Read its Decisions and Reasons (penalty) for more.