TORONTO, March 26, 2019 /CNW/ - A settlement hearing in the matter of Patrick Hugh Lumbers ("Respondent") was held today in Toronto, Ontario before a three-member Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA").
The Hearing Panel approved the settlement agreement dated March 25, 2019 ("Settlement Agreement") between Staff of the MFDA and the Respondent, as a consequence of which the following sanctions were imposed on the Respondent:
- a fine in the amount of $20,000 ("Fine");
- costs in the amount of $2,500 ("Costs");
- the Fine and Costs shall be paid in monthly installments as follows:
- $7,500 on March 26, 2019;
- $2,500 on or before April 26, 2019;
- $2,500 on or before May 26, 2019;
- $2,500 on or before June 26, 2019;
- $2,500 on or before July 26, 2019;
- $2,500 on or before August 26, 2019; and
- $2,500 on or before September 26, 2019.
In the Settlement Agreement, the Respondent admitted that:
between May 2013 and March 2014, he failed to learn, or update material changes to, the essential Know-Your-Client information for a 92 year old client's accounts, contrary to MFDA Rules 2.2.1, 2.2.4, and 2.1.1; and
in May 2013, he recommended for the account of a 92 year old client the purchase of approximately $340,000 of mutual funds which were subject to a 7 year deferred sales charge schedule, without ensuring that the recommendation was suitable having regard to the essential Know-Your-Client factors relevant to the client, including the client's age, health condition, investment time horizon, and investment objectives, contrary to MFDA Rules 2.2.1 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 Members and their approximately 81,000 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, Managing Director, Litigation, 416-943-4619, [email protected]