TORONTO, Sept. 20, 2016 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") has commenced disciplinary proceedings in respect of John Alojz Kodric (the "Respondent"). In its Notice of Hearing dated August 31, 2016, Staff of the MFDA alleges that the Respondent engaged in the following conduct contrary to the By-laws, Rules and/or Policies of the MFDA:
Allegation #1: Between July 2008 and September 4, 2014, the Respondent engaged in securities related business that was not carried out for the account and through the facilities of the Member by facilitating the sale of shares of Sakha Enterprises Corporation totaling at least $248,133 to at least 10 clients and 2 individuals, contrary to MFDA Rules 1.1.1 and 2.1.1.
Allegation #2: Between September 2007 and September 4, 2014, the Respondent failed to ensure that the leveraged investment recommendations he made to client JG and client VR were suitable for the clients and in keeping with the clients' investment objectives, having regard to the clients' relevant "Know Your Client" information and financial circumstances, including but not limited to the clients' ability to afford the costs associated with the investment loans and withstand investment losses, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #3: Between September 2007 and September 4, 2014, the Respondent misrepresented, failed to fully and adequately explain, or omitted to explain the risks, benefits, material assumptions, features and costs of a leveraged investment strategy that he recommended to client JG and client VR, thereby failing to ensure that the leveraged investment recommendations were suitable for the clients and in keeping with the clients' investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #4: Between September 2007 and September 4, 2014, the Respondent requested that clients sign an indemnity letter with respect to a leveraged investment strategy that he recommended to the clients in an attempt to shift the responsibility for assessing suitability from the Respondent to the clients, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #5: Between March 28, 2014 and April 8, 2014, the Respondent failed to comply with the Member's directive not to make contact with clients in response to a client complaint the Member was investigating, thereby interfering with the Member's investigation and its complaint handling obligations, contrary to MFDA Policy No. 3 and MFDA Rules 2.11 and 2.1.1.
Allegation #6: Between February 2008 and February 2014, the Respondent obtained and maintained 8 blank and 5 partially completed pre-signed account forms, which included 3 account forms that the Respondent had altered after the clients had signed the account forms, contrary to MFDA Rule 2.1.1.
The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA's Central Regional Council on October 25, 2016 at 9:30 a.m. (Eastern), or as soon thereafter as the appearance can be held, in order to schedule a date for the commencement of the hearing on the merits and to address any other procedural matters. The first appearance 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 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, [email protected]