MFDA issues Notice of Settlement Hearing in respect of Sterling Mutuals Inc.

TORONTO, May 13, 2016 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") announced that it has issued a Notice of Settlement Hearing regarding the presentation, review and consideration of a proposed settlement agreement by a Hearing Panel of the MFDA's Central Regional Council.

The settlement agreement will be between Staff of the MFDA and Sterling Mutuals Inc. (the "Respondent") and involves matters for which the Respondent may be disciplined by a Hearing Panel pursuant to MFDA By-laws. Some of the allegations also concern the conduct of Armstrong & Quaile Associates Inc. ("A&Q"), a former Member of the MFDA that amalgamated with the Respondent on May 29, 2015. The proposed settlement agreement concerns the allegations that:

(a)  

commencing in June 2010, A&Q, a former Member of the MFDA that amalgamated with Sterling Mutuals Inc. ("Sterling") in May 2015, failed to report to the MFDA that it had received a complaint from client VM indicating that an Approved Person, Barry Hunt, had engaged in personal financial dealings and/or securities related business outside the Member with a client, contrary to MFDA Rules 1.2.2(a) and 2.1.1, and MFDA Policy No. 6;



(b)  

commencing in June 2010, A&Q failed to conduct a reasonable supervisory investigation with respect to the conduct of an Approved Person, Barry Hunt, after it received a complaint from client VM indicating that he had engaged in personal financial dealings and/or securities related business outside the Member with a client, contrary to MFDA Rules 2.5, 2.1.1 and MFDA Policy No. 2;



(c)  

commencing in June 2010, A&Q failed to ensure that a complaint by client VM with respect to the conduct of Approved Person, Barry Hunt, was handled promptly and fairly, contrary to MFDA Rules 2.11, 2.1.1 and 2.1.4 and MFDA Policy No. 3;



(d)  

commencing in August 2010, A&Q failed to ensure that a complaint by clients JH and JH with respect to leveraged investment recommendations made by an Approved Person, BO, was handled promptly and fairly, contrary to MFDA Rules 2.11, 2.1.1 and 2.1.4 and MFDA Policy No. 3;



(e)  

between December 2012 and March 2013, Sterling failed to conduct a reasonable supervisory investigation after receiving a complaint from client JN, and failed to ensure that the complaint was handled promptly and fairly by qualified compliance staff by permitting the subjects of the complaint to attempt to resolve the complaint directly with the client, contrary to MFDA Rules 2.5, 2.11, 2.1.4, and 2.1.1, and MFDA Policies No. 2 and 3; and



(f)  

between May 2014 and March 2015, Sterling failed to adequately supervise the suitability of client portfolios transferred to Sterling by two Approved Persons who became registered with Sterling in May 2014, contrary to MFDA Rules 2.2.1, 2.5 and 2.1.1, and MFDA Policy No. 2.

 

The settlement hearing is scheduled to take place on May 26, 2016, commencing at 12:00 p.m. (Eastern), or as soon thereafter as the matter can be heard, in the hearing room at the offices of the MFDA, located at 121 King Street West, Suite 1000, Toronto, Ontario. The hearing will be open to the public, unless and to the extent that the Hearing Panel determines that all or part of the hearing should proceed in the absence of the public. If the Hearing Panel accepts the settlement agreement, then a copy of the decision of the Hearing Panel and the settlement agreement will be made available to the public.

A copy of the Notice of Settlement Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Notice of Settlement Hearing, the Respondent is registered as a mutual fund dealer in all Canadian provinces and in the Territory of Nunavut, as was A&Q prior to its amalgamation with the Respondent.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 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

RELATED LINKS
http://www.mfda.ca

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