April 19, 2010 (Toronto, Ontario) – The MFDA today 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 Adrian Samuel Leemhuis (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 allegations that:
- the Respondent, in his capacity as the President and Chief Compliance Officer of ASL Direct Inc. (“ASL”), a Member of the MFDA, failed to operate ASL in a compliant manner in accordance with its regulatory obligations, contrary to MFDA Rules, including Rules 2.1.1(c) and 2.5.1 and MFDA Policy No. 2;
- commencing in July 2006, the Respondent and ASL did not maintain sufficient records or properly administer a trailer fee rebate program for which clients were charged monthly fees and prior to the appointment of a Receiver in November 2008, the Respondent and ASL did not accurately quantify ASL’s liability to clients or pay trailer fee rebates that were owed for periods after July 2006, contrary to MFDA Rules 2.1.1 and 5; and
- between March 2003 and April 2008, the Respondent was engaged in outside business activities that were not disclosed in Form 33-109F4 or on the National Registration Database (“NRD”) as required, contrary to MFDA Rules 1.2.1(d), 2.1.1(c) and National Instrument 33-109.
The settlement hearing is scheduled to commence at 1:00 p.m. (Eastern) on April 21, 2010 in the Hearing Room at the MFDA offices, 121 King Street West, Suite 1000, Toronto, Ontario. The hearing will be open to the public, except as may be required for the protection of confidential matters. A copy of the Notice of Settlement Hearing is available on the MFDA website at www.mfda.ca.
The MFDA commenced a disciplinary proceeding in respect of Mr. Leemhuis and ASL Direct Inc. by Notice of Hearing dated October 17, 2008 (MFDA File No. 200832).
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 141 Members and their approximately 73,000 Approved Persons with a mandate to protect investors and the public interest.