January 12, 2017 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) announced that it has issued a Notice of Settlement Hearing regarding the presentation, review and consideration of a proposed settlement agreement by a Hearing Panel of the MFDA’s Central Regional Council.
The settlement agreement will be between Staff of the MFDA and Desjardins Financial Security Investments Inc. (the “Respondent”) and involves matters for which the Respondent may be disciplined by a Hearing Panel pursuant to MFDA By-laws. The proposed settlement agreement concerns the allegations that:
- commencing in December 2008, the Respondent failed to conduct a reasonable supervisory investigation in response to information that it had received that an Approved Person was engaging in actual or potential misconduct and failed to investigate the full nature and extent of the potential misconduct, or take other supervisory and disciplinary measures warranted by the results of its investigation, contrary to MFDA Rules 2.1.1, 2.1.4, 1.1.5, 2.5 and MFDA Policy No. 2;
- commencing in December 2008, after becoming aware that an actual or potential conflict of interest had arisen as a result of an Approved Person’s appointment as estate trustee of the estate of a client, the Respondent failed to take steps to ensure that the resulting conflict was addressed by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to MFDA Rules 2.1.1, 2.1.4, 2.3.1, 1.1.5 and 2.5;
- between August 5, 2008 and April 2010, the Respondent failed to conduct adequate trade supervision or implement sufficient internal controls to ensure the proper handling of client accounts, contrary to MFDA Rules 1.1.5, 2.2.1, 2.5 and MFDA Policy No. 2; and
- after receiving a client complaint on September 12, 2012, the Respondent failed to handle the complaint fairly, contrary to MFDA Rules 2.1.1, 2.1.4, 1.1.5, 2.11 and MFDA Policy No. 3.
The settlement hearing is scheduled to take place on March 15, 2017, commencing at 10:00 a.m. (Eastern), or as soon thereafter as the matter can be held, in the hearing room at the offices of the MFDA, located at 121 King Street West, Suite 1000, Toronto, Ontario.
MFDA settlement hearings are typically held in the absence of the public pursuant to section 20.5 of MFDA By-law No. 1 and Rule 15.2(2) of the MFDA Rules of Procedure. If the Hearing Panel accepts the settlement agreement, then the proceeding will become open to the public and a copy of the decision of the Hearing Panel and the settlement agreement will be made available at www.mfda.ca.
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.
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