MFDA Hearing Panel accepts Settlement Agreement with David Potter

TORONTO, Sept. 20, 2011 /CNW/ - A Settlement Hearing in the matter of David MacIver Potter (the "Respondent") was held today in Toronto, Ontario before a Hearing Panel of the MFDA's Central Regional Council.

The Hearing Panel accepted the Settlement Agreement between MFDA Staff and the Respondent, as a consequence of which:

  1. the Respondent shall be permanently prohibited from conducting securities related business while in the employ of, or associated with, any MFDA Member, pursuant to s. 24.1.1(e) of MFDA By-law No. 1;

  2. the Respondent has paid a fine in the amount of $12,500, pursuant to s. 24.1.1(b) of MFDA By-law No. 1; and

  3. the Respondent has paid costs in the amount $5,000, pursuant to s. 24.2 of MFDA By-law No. 1.

In the Settlement Agreement, the Respondent admitted that:

        (a)      between May 2006 and May 7, 2009, he accepted remuneration directly from 36 clients in the amount of approximately $61,330 in respect of a fee-for-service business he engaged in providing investment advice to these clients, contrary to MFDA Rules 2.4.1(a) and 2.1.1;
           
        (b)      between May 2006 and May 7, 2009, he engaged in securities related business beyond the terms of his registration as a mutual fund salesperson by providing investment advice to certain of these 36 clients in respect of publicly traded equity securities, contrary to MFDA Rules 1.1.2, 1.1.5(a) and 2.1.1;
           
        (c)      between May 2006 and May 7, 2009, he engaged in securities related business that was not carried on for the account and through the facilities of the Member by carrying on a fee-for-service business that provided investment advice to certain of these 36 clients in respect of publicly traded equity securities, contrary to MFDA Rules 1.1.1(a) and 2.1.1;
           
        (d)      in communications with the Member leading up to and including November 19, 2007, he misled the Member by representing to the Member, among other things, that he did not "generally" charge a fee-for-service to clients when he knew that to be a misleading or untrue statement at the time and in the circumstances he made it, in that he omitted material facts from his statement which were required to make his statements to the Member not true or misleading, thereby interfering with the ability of the Member to conduct a reasonable supervisory investigation of his activities and failing to observe high standards of ethics and conduct in the transaction of business, contrary to MFDA Rules 1.1.2 and 2.5.1, and MFDA Rule 2.1.1; and
           
        (e)      between September 1, 2006 and May 7, 2009, the Respondent failed to comply with the policies and procedures of the Member prohibiting fee-for-service arrangements, contrary to MFDA Rules 1.1.2 and 2.5.1, and MFDA Rule 2.1.1.

The Hearing Panel advised that it will issue written reasons for its decision in due course. A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 132 Members and their approximately 75,000 Approved Persons with a mandate to protect investors and the public interest.

SOURCE Mutual Fund Dealers Association of Canada

For further information:

Shaun Devlin
Vice-President, Enforcement
416-943-4672 or sdevlin@mfda.ca


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