TORONTO, Dec. 19, 2013 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") today announced that it has commenced disciplinary proceedings in respect of Mervyn Jacheil Fried (the "Respondent"). 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 June and July 2008, the Respondent failed to (a) use due diligence to learn the essential facts relative to clients DH and EH and two joint accounts that he opened for them in order to ensure, among other things, that any recommendations made and orders accepted for the clients would be suitable, contrary to MFDA Rule 2.2.1(a); and (b) obtain a New Account Application Form signed and dated by clients DH and EH in respect of each of the two joint accounts he opened for them, contrary to MFDA Rule 2.2.2.
Allegation #2: Between June 2008 and April 2009, the Respondent engaged in authorized discretionary trading in the two joint accounts of clients DH and EH by using blank order entry forms signed by the clients, or photocopies of the blank signed order entry forms, to purchase mutual funds in the accounts without obtaining instructions from the clients with respect to (a) the mutual funds to be purchased; and (b) the amount of each mutual fund to be purchased, contrary to MFDA Rules 2.3 and 2.1.1 and the terms of his registration as a mutual fund salesperson.
Allegation #3: Between June 2008 and April 2009, the Respondent failed to ensure that the trades he made in the two joint accounts of clients DH and EH were suitable for the clients, in keeping with the clients' investment objectives, and within the bounds of good business practice, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #4: Between 2005 and 2010, the Respondent collected a total amount of approximately $9,953 in remuneration or fees from at least 21 clients in respect of business conducted by the Respondent on behalf of the Member, contrary to MFDA Rules 2.4.1, 1.1.1(b) and 2.1.1.
Allegation #5: Between 2005 and 2010, the Respondent (a) obtained and maintained blank pre-signed forms for at least 9 clients, including at least 7 forms that could be used to process trades in client accounts; (b) processed trades in 23 client accounts using documents containing client signatures photocopied from blank pre-signed forms; (c) processed trades for 19 clients without a client signature or a limited trading authorization on file; (d) processed trades for 8 clients (for whom there was a signed limited trading authorization on file) without a client signature or any records of trading instructions received from the client and without indicating on the trade ticket that the trade was processed using a limited trading authorization; and (e) processed trades for 3 clients using the client signature of a third party who did not have trading authority on the client account and without evidence on file that the third party had been granted power of attorney or trading authorization on the account, contrary to MFDA Rules 2.3 and 2.1.1.
The first appearance in this matter will take place by teleconference before a Hearing Panel of the MFDA's Central Regional Council on January 28, 2014 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 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 112 Members and their approximately 80,000 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:
Managing Director, Enforcement