WHEREAS on April 23, 2018 the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Hearing, subsequently amended on May 24, 2019, pursuant to section 24.4 of By-law No. 1 in respect of David Michael Gordon (the “Respondent”);
AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA, dated July 31, 2019 (the “Settlement Agreement”), in which the Respondent agreed to a proposed settlement of matters for which the Respondent could be disciplined pursuant to ss. 20 and 24.1 of By-law No. 1;
AND WHEREAS the Hearing Panel is of the opinion that:
- between 2009 and May 2016, the Respondent failed to ensure that an investment recommendation he made to at least 6 clients to invest in precious metals sector funds was suitable having regard to the clients’ relevant Know-Your-Client factors including their age, employment status, investment objectives, investment knowledge, risk tolerance, and time horizon, and the risks associated with concentrating their investment portfolio in precious metals sector funds, contrary to MFDA Rules 2.2.1 and 2.1.1; and
- between 2009 and May 2016, the Respondent failed to fully and adequately explain, or omitted to explain the risks and benefits of investing in precious metals sector funds to at least 6 clients, thereby failing to ensure that his recommendations were suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.
IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:
- The Respondent shall be permanently prohibited from conducting securities related business in any capacity while in the employ or associated with an MFDA Member from the date of this Order, pursuant to s. 24.1.1(e) of MFDA By-law No. 1.
- The Respondent shall pay a fine of $25,000 in certified funds upon acceptance of the Settlement Agreement, pursuant to Section 24.1.1(b) of MFDA By-law No. 1 (“Fine”).
- The Respondent shall pay costs in the amount of $2,500 in certified funds upon acceptance of the Settlement Agreement, pursuant to section 24.2 of MFDA By-law No. 1 (“Costs”).
- The payment by the Respondent of the Fine and Costs shall be made to and received by MFDA Staff in certified funds as follows:
- $15,000 (Fine) upon acceptance of the Settlement Agreement by the Hearing Panel;
- $2,500 (Costs) upon acceptance of the Settlement Agreement by the Hearing Panel;
- $5,000 (Fine) on or before March 31, 2020; and
- $5,000 (Fine) on or before September 30, 2020.
Hon. Thomas R. BraidwoodHon. Thomas R. BraidwoodChair
Darlene BarkerDarlene BarkerIndustry Representative
Holly MillarHolly MillarIndustry Representative