TORONTO, July 17, 2013 /CNW/ - The MFDA today announced that it has commenced disciplinary proceedings in respect of Jeffrey Hanford Harold Young ("Young") and Don Everett Andrews ("Andrews") (collectively, the "Respondents"). MFDA staff alleges in its Notice of Hearing that the Respondent engaged in the following conduct contrary the By-laws, Rules or Policies of the MFDA:
Allegation #1: Between 2006 and 2009, the Respondents engaged in securities related business that was not carried on for the account and through the facilities of the Member by selling, recommending, referring or facilitating the sale of the following securities outside the Member:
|(a)|| an unknown dollar amount of viatical settlements offered by USI Corp. to at least 8
clients and 10 other individuals;
|(b)|| at least $750,000 of an exempt market investment product offered by AHC Corp. to at
least 5 clients; and
|(c)||in the case of Young only, at least $10,000 of SPF Corp. shares to at least 1 client;|
contrary to MFDA Rules 1.1.1(a) and 2.1.1.
Allegation #2: Between 2006 and 2009, Young and Andrews had and continued in other gainful occupations that were not disclosed to and approved by the Member by:
|(a)|| selling, recommending, referring or facilitating the sale of investments offered by USI Corp.,
AHC Corp. and in the case of Young only, SPF Corp.;
|(b)||participating in the ownership and operation of AHC Corp; and|
|(c)||in the case of Young only, owning and operating SPF Corp.;|
contrary to MFDA Rules 1.2.1(d) and 2.1.1.
Allegation #3: Between 2006 and 2009, the Respondents engaged in activities that gave rise to conflicts or potential conflicts of interest between their interests and the interests of clients of the Member, which conflicts they failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, by selling, recommending, referring or facilitating the sale of investments in companies in which they had a direct or indirect interest as described below:
|(a)|| in the case of Young and Andrews, $750,000 of an exempt market investment product offered
by AHC Corp. to at least 5 clients; and
|(b)||in the case of Young only, $10,000 of shares in SPF Corp. to client SD;|
contrary to MFDA Rules 2.1.4 and 2.1.1.
Allegation #4: Between 2006 and 2009, the Respondents entered into a referral arrangement with USI Corp. in respect of the sale of viatical settlements pursuant to which they were paid or entitled to receive referral fees or commissions totaling at least $110,000, contrary to MFDA Rules 2.4.2(b) and 2.1.1.
Allegation #5: Between January 1, 2007 and July 2007, Young entered into a referral arrangement with an Ontario corporation pursuant to which Young directly or indirectly paid, or was required to pay, fees in exchange for the referral of mutual fund clients and viatical settlement investors to Young, contrary to MFDA Rules 2.4.2(b) and 2.1.1.
Allegation #6: Commencing February 23, 2010, Young has failed to answer questions requested by the MFDA during the course of an investigation and has further failed to attend an interview to provide a statement as requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1
The first appearance in this matter will take place by teleconference before a Hearing Panel of the MFDA's Central Regional Council on August 22, 2013 at 10:00 a.m. (Eastern) in the MFDA hearing room located at 121 King Street West, Suite 1000, Toronto, Ontario. The purpose of the appearance is to set a date for the hearing of this matter on its merits and to address any other procedural matters and will be open to the public, except as may be required for the protection of confidential matters.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 115 Members and their approximately 80,000 Approved Persons with a mandate to protect investors and the public interest.
SOURCE: Mutual Fund Dealers Association of Canada
For further information:
Managing Director, Enforcement