WHEREAS John Alojz Kodric (the “Respondent”) entered into a settlement agreement with Staff of the MFDA, dated December 5, 2016 (the “Settlement Agreement”), in which the Respondent agreed to a proposed settlement of matters for which the Respondent could be disciplined pursuant to sections 20 and 24.1 of MFDA By-law No. 1;
AND WHEREAS the Hearing Panel is of the opinion that:
- between July 2008 and September 4, 2015, the Respondent engaged in securities related business that was not carried out for the account and through the facilities of the Member by facilitating the sale of shares of Sakha Enterprises Corporation totaling at least $248,133 to at least 10 clients and 2 other individuals, contrary to MFDA Rules 1.1.1 and 2.1.1;
- between October 2007 to September 4, 2015, the Respondent failed to ensure that the leveraged investment strategy recommendations he made to client JG and client VR were suitable for the clients having regard to their financial circumstances, including but not limited to, the clients’ ability to afford the costs associated with the investment loans and withstand investment losses in the event that the investment strategy did not perform as the Respondent represented it should, contrary to MFDA Rules 2.2.1 and 2.1.1;
- between February 2008 and February 2014, the Respondent obtained and maintained 8 blank and 5 partially completed pre-signed account forms, and 3 account forms which the Respondent had made changes to after the clients had signed the account forms, at the request of the clients, but failed to obtain the clients’ initials beside the changes, contrary to MFDA Rule 2.1.1; and
- between March 28, 2014 and April 8, 2014, the Respondent failed to abide by the Member’s request to not make contact with clients in response to a client complaint, contrary to MFDA Policy No. 3 and MFDA Rule 2.11.
IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:
- The following penalties and costs are imposed on the Respondent:
- a one year 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, pursuant to section 24.1.1(e) of MFDA By-law No. 1;
- a fine in the amount of $45,000, pursuant to section 24.1.1(b) of MFDA By-law No. 1, payable as follows:
- $10,000 payable on or before the date of the settlement hearing; and
- The balance of $35,000 payable in 7 monthly instalments of $5,000 each, commencing on January 9, 2017;
- costs in the amount of $5,000, pursuant to section 24.2 of MFDA By-law No. 1.
- The Respondent shall in the future comply with MFDA Rules 1.1.1, 2.1.1, 2.2.1 and 2.11, and MFDA Policy No. 3; and
- If at any time a non-party to this proceeding requests production of, or access to, any materials filed in, or the record of, this proceeding, including all exhibits and transcripts, then the MFDA Corporate Secretary shall not provide copies of, or access to, the requested documents to the non-party without first redacting from them any and all intimate financial or personal information, pursuant to Rules 1.8(2) and (5) of the MFDA Rules of Procedure.
Mark J. SandlerMark J. SandlerChair
Kenneth P. MannKenneth P. MannIndustry Representative
Joseph YassiJoseph YassiIndustry Representative