February 1, 2018 (Toronto, Ontario) – A Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”) has issued its Reasons for Decision dated February 1, 2018 in connection with a settlement hearing held in Toronto, Ontario on December 11, 2017 in the matter of Bernd Franz Adolf Niermann (“Respondent”).
In its Reasons for Decision, the Hearing Panel confirmed the sanctions imposed on the Respondent, namely:
- a prohibition from conducting securities related business in any capacity over which the MFDA has jurisdiction for a period of five years from December 11, 2017 to December 11, 2022, after which date the Respondent shall be entitled to apply to be registered to conduct securities related business in any capacity over which the MFDA has jurisdiction;
- shall pay client AP the amount of $28,900 plus interest in accordance with the terms of the promissory notes as described in the Settlement Agreement by no later than December 11, 2019 and provide proof of such payment to the MFDA;
- in the event that the Respondent fails to repay client AP in full prior to December 11, 2019, the Respondent shall be prohibited from conducting securities related business in any capacity over which the MFDA has jurisdiction an additional five years to December 11, 2027;
- shall pay costs in the amount of $2,500.
In the Settlement Agreement dated December 11, 2017, the Respondent admitted that:
- between August 2008 and November 7, 2014, he borrowed $71,600 from three clients, thereby giving rise to a conflict of interest which he failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4 and 2.1.1;
- between July 2008 and November 2014, he misled the Member on annual compliance attestations, and during the course of the investigation into his conduct, by failing to disclose that he had borrowed monies from clients, thereby interfering with the ability of the Member to supervise his conduct, contrary to MFDA Rules 1.1.2, 2.5.1 and 2.1.1;
- commencing on December 12, 2014, he misled MFDA Staff when he failed to advise Staff that he had borrowed monies from client AT and client PL, contrary to MFDA Rule 2.1.1; and
- between November 24, 2005 and July 28, 2014, he obtained and maintained blank or partially complete pre-signed account forms, and/or altered account forms after the clients had signed them, contrary to MFDA Rule 2.1.1.
Copies of the Reasons for Decision and the Settlement Agreement are available on the MFDA website at www.mfda.ca. During the period described in the Reasons for Decision, the Respondent carried on business in the Collingwood, Ontario 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 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.