TORONTO, Jan. 28, 2015 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of Tolu Adeola (may also be known as Adeola Tolu) (the "Respondent") by Notice of Hearing dated June 25, 2014.
A disciplinary hearing in this proceeding was held today in Toronto, Ontario before a three-person Hearing Panel of the MFDA's Central Regional Council. After hearing submissions from Staff of the MFDA, the Hearing Panel found that the five (5) allegations concerning the Respondent set out in the Notice of Hearing had been established. In particular, the Hearing Panel made the following findings of misconduct:
Allegation #1: Between December 4, 2007 and July 5, 2008, the Respondent prepared and submitted new client account forms and loan applications for seven clients which the Respondent knew or ought to have known contained false, incorrect or misleading information, thereby failing to observe high standards of ethics and conduct in the transaction of business and engaging in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.
Allegation #2: Between December 4, 2007 and July 5, 2008, 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 and implemented in the accounts of seven clients, thereby failing to ensure that the leveraged investment strategy was suitable for the clients and in keeping with the clients' investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #3: Between December 4, 2007 and July 5, 2008, the Respondent failed to ensure that the leveraged investment strategy that he recommended and implemented in the accounts of seven clients was suitable for the clients and in keeping with their 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 #4: On or about April 4, 2012, the Respondent engaged in business conduct which was unbecoming and detrimental to the public interest by abandoning his business as an Approved Person without notice to his clients or to the Member, thereby frustrating the ability of the Member and MFDA Staff to investigate his conduct, contrary to MFDA Rule 2.1.1.
Allegation #5: Since December 8, 2011, the Respondent failed to cooperate with the Member's investigation arising out of a client complaint, contrary to the Member's policies and procedures pursuant to MFDA Rules 1.1.2, 2.5.1, 2.11 and MFDA Rule 2.1.1.
The Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons for its decision in due course:
- a permanent prohibition on the authority of the Respondent to conduct securities related business in any capacity while in the employ of, or associated with, any MFDA Member;
- a fine in the amount of $250,000; and
- costs in the amount of $10,000.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 107 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: Hugh Corbett, Managing Director, Enforcement, 416-943-4685, [email protected]