TORONTO, July 29 /CNW/ - The Mutual Fund Dealers Association of Canada
("MFDA") today announced that it has commenced disciplinary proceedings
against Keybase Financial Group Inc. and Dax Sukhraj.
In its Notice of Hearing, MFDA staff alleges the following conduct
contrary to the By-laws, Rules or Policies of the MFDA:
Allegation 1: Between March 1, 2004 and December 31, 2005, Keybase failed
to establish, implement and maintain a two-tier compliance structure to
supervise client account activity, in that it failed to maintain and ensure
compliance with policies and procedures requiring branch managers to supervise
trading activity at the branch office level and failed to retain sufficient
evidence of the review of the suitability of client trading activity, contrary
to MFDA Rule 2.5 and MFDA Policy 2.
Allegation 2: Between March 1, 2004 and December 31, 2005, Keybase
delegated certain supervisory tasks to a person who lacked the requisite
proficiency standards of a compliance officer as set out in MFDA Rule 1.2.3
and contrary to MFDA Rule 2.5.5.
Allegation 3: Between March 1, 2004 and December 31, 2005, Keybase failed
to review and approve at all or in a timely manner the opening of new client
accounts and maintain evidence of such review and approval, contrary to MFDA
Rules 2.2.3 and 2.5.3(b)(ii) and MFDA Policy 2.
Allegation 4: Between March 1, 2004 and December 31, 2005, Keybase failed
to ensure New Account Application Forms ("NAAFs") had been completed and
failed to maintain or complete Know Your Client ("KYC") information on client
accounts and permitted trading in such accounts, contrary to MFDA Rules 2.2.1
Allegation 5: Between March 1, 2004 and December 31, 2005, Keybase failed
to establish, implement and maintain policies and procedures to identify,
review and approve dual occupations of its Approved Persons, contrary to MFDA
Allegation 6: Between March 1, 2004 and December 31, 2005, Keybase failed
to establish, implement and maintain policies and procedures to review and
approve marketing materials, contrary to MFDA Rule 2.7.3.
Allegation 7: Between March 1, 2004 and 2006, Sukhraj, as the president
and sole director of Keybase, engaged in business conduct or practice that was
unbecoming or detrimental to the public interest by failing to ensure that
Keybase maintained a compliance program that identified and addressed material
risks of non-compliance and that appropriate supervision and compliance
procedures to manage those risks had been implemented, contrary to MFDA Rules
2.1.1(c) and 2.5.1 and MFDA Policy 2.
The first appearance in this matter will take place by teleconference
before a Hearing Panel of the MFDA Central Regional Council in the Hearing
Room located at the offices of the MFDA at 121 King Street West, Suite 1000,
Toronto, Ontario on Monday, September 29, 2008 at 10:00 a.m. (Eastern) or as
soon thereafter as can be held.
The purpose of the first appearance is to schedule the date for the
commencement of the hearing on its merits and to address any other procedural
The first appearance is open to the public, except as may be required for
the protection of confidential matters. Members of the public attending the
first appearance will be able to listen to the proceeding by teleconference.
A copy of the Notice of Hearing is available on the MFDA website at
The Mutual Fund Dealers Association of Canada is the self-regulatory
organization for Canadian mutual fund dealers. The MFDA regulates the
operations, standards of practice and business conduct of its 158 Members and
their approximately 75,000 Approved Persons with a mandate to protect
investors and the public interest.
For further information:
For further information: Shaun Devlin, Vice-President, Enforcement,
(416) 943-4672 or email@example.com