TORONTO, Jan. 16, 2020 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of Meng Xi Li ("Respondent") by Notice of Hearing dated May 3, 2019.
A disciplinary hearing in this proceeding was held today in Vancouver, British Columbia before a three-member Hearing Panel of the MFDA's Pacific Regional Council. After receiving evidence and hearing submissions from Staff of the MFDA, the Hearing Panel found that the five allegations set out in the Notice of Hearing had been established. In particular, the Hearing Panel made the following findings of misconduct:
Allegation #1: Between January 2016 and January 2017, the Respondent allowed a client to open and trade in an investment account at the Member using the identity and contact information of a different individual, thereby concealing the identity of the true account holder, and circumventing the Member's account and trade supervision processes, contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.2.1, 2.5.1 and 1.1.2.
Allegation #2: Between January 2016 and January 2017, the Respondent recorded notes in the Member's client management system which falsely described trade instructions for trades submitted in a client account, thereby misleading the Member and circumventing the Member's account and trade supervision processes, contrary to MFDA Rule 2.1.1.
Allegation #3: In September 2016, the Respondent transferred $100,000 from a client investment account to the Respondent's personal bank account, thereby engaging in personal financial dealings with the client which gave rise to a conflict or potential conflict of interest that the Respondent failed to disclose to the Member or address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the policies and procedures of the Member and MFDA Rules 2.1.4 and 2.1.1.
Allegation #4: Commencing in January 2017, the Respondent made false or misleading statements to the Member and/or Staff of the MFDA during the course of investigations into her conduct, contrary to MFDA Rule 2.1.1.
Allegation #5: On November 2, 2016, the Respondent falsified a client's signature on an account form and submitted it to the Member for processing, contrary to MFDA Rule 2.1.1.
After hearing submissions from Staff with respect to penalty, the Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons in due course:
- a permanent prohibition from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member;
- a fine in the amount of $100,000; and
- costs in the amount of $7,500.
A copy of the Notice of Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Notice of Hearing, the Respondent carried on business in the Vancouver, British Columbia area.
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