January 25, 2017 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Roland Lemay (the “Respondent”) by Notice of Hearing dated May 13, 2016 (the “Notice of Hearing”).
As the result of a settlement agreement entered into between Staff of the MFDA and the Respondent, the settlement hearing in this proceeding will take place on February 2, 2017, commencing at 10:00 a.m. (Pacific) or as soon thereafter as the matter can be heard, in the hearing room at the British Columbia Securities Commission, located at 1200-701 West Georgia Street, Vancouver, British Columbia.
The subject matter of the proposed settlement agreement concerns matters for which the Respondent may be disciplined pursuant to ss. 20 and 24.1.1 of By-law No. 1 of the MFDA. In particular, the settlement agreement concerns allegations that the Respondent:
- between January 2007 and December 30, 2014, recommended to at least 142 clients that the clients concentrate all, or a substantial portion, of their investment holdings in precious metals sector funds, without conducting adequate due diligence to assess the suitability of his investment recommendations on a client-by-client basis having regard to the essential Know-Your-Client (“KYC”) factors relevant to each individual client, including the client’s age, risk tolerance, ability to withstand investment losses, and investment knowledge and experience, contrary to MFDA Rule 2.2.1 and 2.1.1;
- between January 2007 and December 30, 2014, recorded that at least 142 clients had “high” risk tolerance on account forms in order to ensure that the KYC information for the clients matched his investment recommendations to concentrate all, or a substantial portion, of the clients’ investment holdings in precious metals sector funds, contrary to MFDA Rule 2.2.1 and 2.1.1;
- between January 2007 and December 30, 2014, failed to fully explain the risks and benefits of investing in precious metals sector funds, thereby failing to ensure that his recommendations were suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1;
- between January 2007 and December 30, 2014, failed to use due diligence to learn and accurately record the essential KYC factors relative to clients DH and FH prior to making investment recommendations and accepting investment orders from clients DH and FH, contrary to MFDA Rule 2.2.1 and 2.1.1; and
- between January 2007 and December 30, 2014, failed to use due diligence to ensure that each order accepted and recommendation made to clients DH and FH was suitable for the clients and in keeping with their investment objectives when recommended that the clients concentrate all of their investment holdings in a single precious metals sector fund, contrary to MFDA Rule 2.2.1 and 2.1.1.
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.
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 carried on business in Vancouver, British Columbia.
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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