December 13, 2016 (Toronto, Ontario) – A settlement hearing in the matter of IPC Investment Corporation (the “Respondent”) was held on December 13, 2016 in Toronto, Ontario before a three-member Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”).
The Hearing Panel accepted the settlement agreement (the “Settlement Agreement”) between Staff of the MFDA and the Respondent, as a consequence of which the following penalties and costs were imposed:
- a fine in the amount of $100,000,
- costs in the amount of $15,000; and
- shall in the future comply with MFDA Rule 2.5.1 and Rule 2.1.1.
In the Settlement Agreement, the Respondent admitted that:
- from about May 10, 2013 to September 23, 2013, failed to report Approved Person Jeffrey Mushaluk’s suspected prohibited trading activities on the MFDA METS reporting system and failed to conduct a timely supervisory investigation of those activities, contrary to MFDA Rule 2.5.1, Rule 2.1.1, and the reporting requirements set out under MFDA Policy No. 6;
- from about 2010 to April 2014, failed to adequately supervise Approved Person JEC’s investment recommendations to clients, which resulted in the clients holding investments concentrated in gold-related sector funds, thus failing to ensure that each order accepted or recommendation made for any account of clients were suitable for the client based on the essential facts relative to the client and any investments within the account, contrary to MFDA Rule 2.2.1;
- from in or about 2010 to April 2014, failed to adequately supervise concentration risk in the accounts of some of Approved Person JEC’s clients contrary to MFDA Rule 2.2.1; and
- from about August 2012 to January 2014, failed to take appropriate supervisory action regarding Approved Person JEC’s non-compliance with Member directives, thus failing to ensure the handling of its business was in accordance with MFDA By-laws, Rules and Policies and with applicable securities legislation, contrary to MFDA Rule 2.5.1 and Rule 2.1.1.
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.