TORONTO, Nov. 7, 2013 /CNW/ - A Settlement Hearing in the matter of PDQ Financial Services Inc. ("PDQ") and Cesidio ("Sid") Negri ("Negri") (collectively, the "Respondents") was held today in Toronto, Ontario before a three-person Hearing Panel of the MFDA's Central Regional Council.
The Hearing Panel accepted the Settlement Agreement between MFDA Staff and the Respondents, as a consequence of which:
(a) the authority of the Negri to conduct securities related business while in the employ of, or associated with, any Member of the MFDA shall be suspended from November 7, 2013 to January 31, 2014;
(b) Negri shall be permanently prohibited from being registered or acting in the capacity of Ultimate Designated Person, Chief Compliance Officer, Branch Manager or any compliance position for a Member of the MFDA commencing November 7, 2013;
(c) Negri shall be prohibited from being an officer, director or acting as a supervisor for a Member of the MFDA for a period of 5 years commencing November 7, 2013;
(d) within 12 months of November 7, 2013, Negri shall write or rewrite and pass the Conduct and Practices Handbook course offered by the Canadian Securities Institute or another course approved by the MFDA that includes content concerning business ethics and procedure;
(e) Negri shall pay a fine of $15,000;
(f) Negri shall pay costs of $2,500; and
(g) PDQ's membership in the MFDA shall be terminated effective November 7, 2013 and thereafter PDQ shall cease to have any of the rights and privileges of membership in the MFDA;
In the Settlement Agreement, the Respondents admitted that:
(a) between August 2007 and August 2012, while PDQ was designated in early warning, the Respondents frequently contravened the early warning requirements set out in MFDA Rule 3.4.2 by:
a. making payments without the prior written consent of the MFDA:
i. by way of loan, advance, bonus, dividend, repayment of capital or other distribution of assets from PDQ to directors, officers and shareholders of PDQ;
ii. from PDQ that had the effect of increasing PDQ's non-allowable assets; and
iii. from PDQ that had the effect of reducing PDQ's capital;
contrary to MFDA Rules 3.4.2(b)(iv) and 3.4.2(c) and MFDA Rule 2.1.1; and
b. failing to provide timely responses to requests by MFDA Staff for reports and information required by MFDA Staff to assess and monitor the financial conditions and operations of PDQ, contrary to MFDA Rules 3.4.2(b)(vii) and 2.1.1.
(b) between March 2011 and July 2012, while PDQ was designated in early warning, Negri made withdrawals from PDQ to pay personal expenses in excess of the amounts that had been approved by MFDA Staff, contrary to MFDA Rules 3.4.2(b)(iv)(C) and 3.4.2(c) and MFDA Rule 2.1.1; and
(c) between 2010 and 2012, while in the course of attempting to solicit new investors in PDQ, PDQ and Negri circulated a sales communication to prospective investors in PDQ that inaccurately stated or implied that the MFDA and other regulators had endorsed PDQ's business model or plan, products, suitability process or other features of its operations, products or services, contrary to MFDA Rules 2.7.2 and 2.1.1.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 114 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