July 21, 2017 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) has commenced disciplinary proceedings in respect of Kenneth John Fialho (“Respondent”). In its Notice of Hearing dated July 11, 2017, Staff of the MFDA alleges that the Respondent engaged in the following conduct contrary to the By-laws, Rules and/or Policies of the MFDA:
Allegation #1: Between April 16, 2012 and November 27, 2013, the Respondent submitted 5 trades in 5 client accounts without sufficient evidence of instructions or authorization from the clients, contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.3.1(a), 2.3.2, 2.10 and 1.1.2.
Allegation #2: In January 2014, the Respondent attempted to process two trades in reliance upon limited trading authorizations (“LTAs”) in contravention of a direction from the Member prohibiting the use of LTAs by the Respondent, contrary to MFDA Rule 2.1.1(b) and (c).
Allegation #3: Between December 2009 and October 2013, the Respondent accepted and submitted to the Member 5 client account forms that he knew or ought to have known contained falsified signatures and initials of clients, contrary to MFDA Rules 2.1.1, 2.2.1, 2.5.1 and 1.1.2.
Allegation #4: Commencing on September 8, 2015, in response to questions from Staff of the MFDA (“Staff”) concerning conduct that was subject to investigation, the Respondent sent Staff fabricated notes of conversations that had not occurred with client MD and made false or misleading statements to Staff concerning client instructions that he falsely claimed that he had received from client MD, contrary to MFDA Rule 2.1.1 and MFDA By-law No. 22.1.
The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA’s Central Regional Council on September 12, 2017 at 9:00 a.m. (Eastern), or as soon thereafter as the appearance can be held, to schedule a date for the commencement of the hearing on the merits and to address any other procedural matters. The appearance will be open to the public, except as may be required for the protection of confidential matters.
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 conducted business in the Mississauga, Ontario area.
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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