MFDA Hearing Panel issues Reasons for Decision in the matter of Joseph Laurie

TORONTO, Oct. 27, 2015 /CNW/ - A Hearing Panel of the Atlantic Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA") has issued its Reasons for Decision in connection with a settlement hearing held in Halifax, Nova Scotia on August 28, 2015 in the matter of Joseph Daniel Laurie (the "Respondent"). The Reasons for Decision relate to the Hearing Panel's acceptance of the settlement agreement (the "Settlement Agreement") entered into between the Respondent and Staff of the MFDA. In its Reasons for Decision dated October 26, 2015, the Hearing Panel confirmed the following sanctions imposed on the Respondent:

  • shall be suspended from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member for a period of 2½ years (30 months) commencing from the date of the final Order;
  • shall be permanently prohibited from engaging in any leveraging activities with clients, including recommending or applying for investment loans for clients;
  • has paid a fine in the amount of $40,000;
  • has paid costs in the amount of $10,000; and
  • shall in the future comply with MFDA Rules 2.2.1 and 2.1.1.

In the Settlement Agreement, the Respondent admitted that:

i)    

between 2005 and 2011, he misrepresented the know-your-client information on the account opening and loan application documents of 25 clients, thereby engaging in conduct unbecoming an Approved Person and failing to observe high standards of ethics and practice in the conduct of business, contrary to MFDA Rules 2.2.1 and 2.1.1;



ii)   

between 2005 and 2011, he misrepresented, failed to fully and adequately explain, or omitted to explain, the risks, benefits, material assumptions, costs and features of a leveraged investment strategy that he recommended and implemented in the accounts of 25 clients, including the risks that:




a)

the underlying investments might decline in value such that the clients might incur investment losses and would be unable to rely on the sale proceeds of the investments to pay back their investment loans; and





b)

the underlying investments might reduce, suspend or cancel altogether the distributions paid to investors upon which the clients were relying to make the payments on their investment loans, thereby failing to ensure that the leveraged investment strategy was suitable and appropriate for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1; and




iii)  

between 2005 and 2011, he recommended and facilitated the implementation of a leveraged investment strategy in the accounts of 25 clients without performing the necessary due diligence to learn the essential facts relative to the clients and without ensuring that the leveraged investment strategy was suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.

A copy of the Reasons for Decision is available on the MFDA website at www.mfda.ca. During the period described in the Reasons for Decision, the Respondent carried on business in Springhill, Nova Scotia.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 102 Members and their approximately 83,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA's complaint and enforcement processes, as well as links to 'Check an Advisor' and other Investor Tools, visit the For Investors page on the MFDA website.

SOURCE Mutual Fund Dealers Association of Canada

For further information: Charles Toth, Director, Litigation, 416-943-4619, ctoth@mfda.ca

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