TORONTO, May 6, 2016 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of Rodney M. Warren (the "Respondent") by Notice of Hearing dated October 15, 2015 (the "Notice of Hearing").
The hearing of this matter on its merits took place May 3-5, 2016 in Vancouver, British Columbia before a three-member Hearing Panel of the MFDA's Pacific Regional Council. Prior to the hearing, the parties filed an Agreed Statement of Facts (the "Agreed Statement of Facts") in which the Respondent admitted to facts constituting contraventions of MFDA By-laws, Rules or Policies, for which he could be penalized by a Hearing Panel pursuant to section 24.1 of MFDA By-law No. 1. In particular, the Respondent admitted that:
Allegation #1: Between August 2006 and January 2013, he failed to ensure that his leveraged investment recommendations were suitable for clients DZ and EZ and clients HN and MN having regard to the clients' "Know-Your Client" information and financial circumstances, including but not limited to, the clients' age, employment status, ability to afford the costs associated with the investment loans, and ability to withstand investment losses, contrary to MFDA Rules 2.2.1 and 2.1.1.
After hearing the evidence and submissions from the parties, the Hearing Panel found that the following allegation concerning the Respondent had also been established:
Allegation #3: Between May 22, 2012 and September 17, 2012, he failed to report a complaint to the Member and attempted to negotiate a settlement with two clients without the Member's knowledge or approval, which prevented the Member from complying with its complaint handling obligations and conducting a reasonable supervisory investigation, contrary to MFDA Policy No. 6, subsection 4.1(a), MFDA Policy No. 3, and MFDA Rules 2.1.1, 1.1.2 and 2.5.1.
Following submissions from the parties with respect to penalty, the Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons for its decision as to misconduct and penalty in due course:
- a suspension of 90 days, commencing May 9, 2016, on the authority of the Respondent to conduct securities related business in any capacity over which the MFDA has jurisdiction; (the "Suspension");
- after the conclusion of the Suspension, a period of 12 months of strict supervision, followed by 12 months of close supervision;
- a permanent prohibition on leveraging clients;
- a fine in the amount of $100,000; and
- costs in the amount of $10,000.
Copies of the Notice of Hearing and the Agreed Statement of Facts are available on the MFDA website at www.mfda.ca. During the period described in the Agreed Statement of Facts, the Respondent carried on business in the Vancouver and Langley, British Columbia areas.
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 83,000 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