TORONTO, Jan. 26, 2012 /CNW/ - A Settlement Hearing in the matter of W. H. Stuart Mutuals Ltd. (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 the
Respondent and MFDA Staff, as a consequence of which the Respondent has
paid a $45,000 fine and costs in the amount of $2,500. The fine and
costs shall be payable in accordance with the following terms:
a) $20,000 of the fine and $2,500 in costs shall be payable
immediately upon acceptance of the Settlement Agreement; and
b) the remaining $25,000 of the fine shall be paid by 10 monthly
installments of $2,500 per month payable on the last day of each month
commencing on January 31, 2012.
The Respondent shall fully implement the Leverage Review Action Plan
referenced in paragraph 25 of the Settlement Agreement.
In the Settlement Agreement, the Respondent admitted that:
a) prior to February 28, 2009, the Respondent failed to establish,
implement, maintain and adhere to adequate policies and procedures to
i) that branch managers and head office compliance staff conducted
adequate trade supervision;
ii) that adequate records were maintained of trade supervision that
was conducted including records of inquiries made, responses received
and resolutions achieved; and
iii) the suitability of leveraged trades and leveraging
recommendations that Approved Persons made to the Respondent's clients;
contrary to MFDA Rules 2.2.1, 2.5 and 2.10 and MFDA Policy No. 2; and
b) while the Respondent was designated in early warning from
February 12, 2009 to September 28, 2009, the Respondent breached early
warning restrictions that were applicable to it by paying a bonus to an
officer of the Respondent in February 2009 and by making a direct or
indirect payment to a related party in July 2009 without the prior
written consent of MFDA Staff, contrary to MFDA Rule 3.4.2(b)(iv)(C).
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 125 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:
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