MONTREAL, Sept. 20 /CNW/ - A Hearing Panel appointed pursuant to IDA
By-law 20 has imposed discipline penalties on Fernando Meffé, at all material
times an Approved Person at the head office of National Bank Financial Inc., a
Member of the IDA.
Following a settlement hearing held on August 17, 2007, a Hearing Panel
accepted a Settlement Agreement between staff of the IDA and Mr. Meffé wherein
Mr. Meffé admitted that he had contravened Regulation 1300.1 and By-law 29.1.
in that, during the period from December 2000 to October 2001, he signed the
opening documentation for options accounts on behalf of approximately one
hundred clients without ever communicating with the clients or verifying their
risk tolerance and investment objectives; and he requested that the accounts
of several clients belonging to two representatives (Team P and S), who were
not approved to trade options, be approved for trading in high-risk option
strategies although documentation specified that their account objective was
to reduce risk.
Further, Mr. Meffé admitted that, between February 2001 to October 2001,
he carried out or permitted the carrying out of options trades on behalf of
several clients without ensuring that such trades were suitable for each
client based on their objectives and risk tolerance; he carried out or
permitted the carrying out of options trades on behalf of several clients
without communicating with such clients and without obtaining their prior
authorization; and he failed to fulfil his undertaking to his employer that he
would communicate directly with the clients of Team P and S in all matters
relating to their clients' options requirements.
Despite reminders from his employer's Compliance Department, Mr. Meffé
did not change his way of operating and many clients of Team P and S ended up
with very large positions in NASDAQ index options which were unsuitable and
resulted in significant losses for which they were compensated.
The IDA became aware of these matters in 2004 and 2005 in the course of
investigations regarding other individuals.
For his misconduct, Mr Meffé has been assessed a five-year prohibition of
approval in an officer category and/or in a supervisory capacity; a seven-year
prohibition of approval as a Designated Registered Options Principal or as an
Alternate Registered Options Principal; a four-month suspension of approval
for trading options; the requirement to successfully pass the Derivatives
Fundamentals and Options Licensing Course within a 12-month period as a
condition to the maintenance of his approval to trade options after the
four-month suspension period: a twelve-month close supervision period; and a
fine in the amount of $45,000 and $5,000 in costs.
Mr. Meffé is a registrant with National Bank Financial Inc.
For a complete summary of facts, please see IDA Bulletin 3672 at
www.ida.ca or www.accovam.ca.
The Investment Dealers Association of Canada (IDA) is the national
self-regulatory organization of the securities industry. The IDA's mission is
to protect investors, foster market integrity and enhance the efficiency and
competitiveness of the Canadian capital markets. The IDA enforces rules and
regulations regarding the sales, business and financial practices of its
Member firms and their approved persons. Investigating complaints and
disciplining Members and approved persons is part of the IDA's regulatory
For further information:
For further information: Claudyne Bienvenu, Regional Director,
Regulation, (514) 392-3435 or firstname.lastname@example.org; Jeffrey Kehoe, Director,
Enforcement Litigation, (416) 943-6996 or email@example.com