TORONTO, Jan. 26, 2012 /CNW/ - A Settlement Hearing in the matter of W. H. Stuart Mutuals Ltd. (the "Respondent") was held today in Toronto, Ontario before a Hearing Panel of the MFDA's Central Regional Council.
The Hearing Panel accepted the Settlement Agreement between the Respondent and MFDA Staff, as a consequence of which the Respondent has paid a $45,000 fine and costs in the amount of $2,500. The fine and costs shall be payable in accordance with the following terms:
a) $20,000 of the fine and $2,500 in costs shall be payable immediately upon acceptance of the Settlement Agreement; and
b) the remaining $25,000 of the fine shall be paid by 10 monthly installments of $2,500 per month payable on the last day of each month commencing on January 31, 2012.
The Respondent shall fully implement the Leverage Review Action Plan referenced in paragraph 25 of the Settlement Agreement.
In the Settlement Agreement, the Respondent admitted that:
a) prior to February 28, 2009, the Respondent failed to establish, implement, maintain and adhere to adequate policies and procedures to ensure:
i) that branch managers and head office compliance staff conducted adequate trade supervision;
ii) that adequate records were maintained of trade supervision that was conducted including records of inquiries made, responses received and resolutions achieved; and
iii) the suitability of leveraged trades and leveraging recommendations that Approved Persons made to the Respondent's clients;
contrary to MFDA Rules 2.2.1, 2.5 and 2.10 and MFDA Policy No. 2; and
b) while the Respondent was designated in early warning from February 12, 2009 to September 28, 2009, the Respondent breached early warning restrictions that were applicable to it by paying a bonus to an officer of the Respondent in February 2009 and by making a direct or indirect payment to a related party in July 2009 without the prior written consent of MFDA Staff, contrary to MFDA Rule 3.4.2(b)(iv)(C).
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 125 Members and their approximately 75,000 Approved Persons with a mandate to protect investors and the public interest.
For further information:
416-943-4672 or [email protected]