December 6, 2016 (Toronto, Ontario) – A settlement hearing in the matter of John Alojz Kodric (the “Respondent”) was held on December 6, 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 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;
- a fine in the amount of $45,000, payable as follows:
- $10,000 payable on or before the date of the settlement hearing; and
- The balance of $35,000 payable in seven monthly instalments of $5,000 each, commencing on January 9, 2017;
- costs in the amount of $5,000.
In the Settlement Agreement, the Respondent admitted that:
- between July 2008 and September 4, 2015, he 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, he 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, he 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, he 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.
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.