MFDA Hearing Panel makes findings against Michael Harrigan

July 5, 2018 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Michael Andrew Harrigan (“Respondent”) by Notice of Hearing dated May 12, 2014.

The hearing of this matter on its merits was heard in Halifax, Nova Scotia before a three-member Hearing Panel of the MFDA’s Atlantic Regional Council on the following dates: September 21-22, and 25, 2015, September 28, 2015 to October 2, 2015 and October 8, 2015, January 11-15, 2016 and April 19-21, 2016, June 15, 2016, December 20-22, 2016. After receiving the evidence and hearing submissions from the parties, the Hearing Panel reserved its decision as to misconduct.

The Hearing Panel has found that the allegations concerning the Respondent set out in the Notice of Hearing have been established. In particular, the Hearing Panel made the following findings of misconduct against the Respondent:

1. between 2005 and 2008, he misrepresented the Know-Your-Client information on the account opening and loan application documents of six clients thereby engaging in conduct unbecoming an Approved Person and failing to observe high standards of ethics and practice in the conduct of business, contrary to MFDA Rules 2.2.1 and 2.1.1.
2. between 2005 and 2008, he misrepresented, failed to fully and adequately explain, or omitted to explain, the risks, benefits, material assumptions, costs and features of a leveraged investment strategy that he recommended and implemented in the accounts of six clients including the risks that:
   1. the underlying investments might decline in value such that the clients might incur investment losses and would be unable to rely on the sale proceeds of the investments to pay back their investment loans; and
   2. the underlying investments might reduce, suspend or cancel altogether the distributions paid to investors upon which the clients were relying to make the payments on their investment loans,

   thereby failing to ensure that the leveraged investment strategy was suitable and appropriate for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1

3. between 2005 and 2008, he recommended and facilitated the implementation of a leveraged investment strategy in the accounts of six clients without performing the necessary due diligence to learn the essential facts relative to the clients and without ensuring that the leveraged investment strategy was suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.

The Hearing Panel advised that it will issue written reasons for its decision as to misconduct in due course. Submissions with respect to penalty will take place on a date to be determined and announced accordingly.

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 Dartmouth, Nova Scotia.

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 82,000 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.