November 26, 2020 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Mitchell Sumka (“Respondent”) by Notice of Hearing dated December 11, 2019.
A disciplinary hearing in this matter was held November 24, 2020 by electronic hearing before a three-member Hearing Panel of the MFDA’s Prairie Regional Council. Prior to the hearing, the parties filed an Agreed Statement of Facts dated November 9, 2020 (“Agreed Statement of Facts”) in which the Respondent admitted to facts constituting contraventions of MFDA By-laws, Rules or Policies, for which the Respondent could be penalized by a Hearing Panel pursuant to section 24.1 of MFDA By-law No. 1. In particular, the Respondent admitted that:
- Between August 2015 and March 2018, the Respondent misappropriated approximately $659,232 from two mutual fund clients and 12 other individuals, thereby failing to deal fairly, honestly and in good faith with the clients, failing to observe high standards of ethics and conduct in the transaction of business, engaging in business conduct which is unbecoming and detrimental to the public interest, and failing to be of such character and business repute as is consistent with the standard of conduct, contrary to MFDA Rule 2.1.1; and
- Commencing in September 2018, the Respondent failed to cooperate with an investigation by MFDA Staff (“Staff”) into his conduct, contrary to section 22.1 of MFDA By-Law No. 1.
Following submissions from the parties concerning sanctions, the Hearing Panel reserved its decision and advised that it will issue its decision as to sanctions along with written reasons in due course.
Copies of the Notice of Hearing and the Agreed Statement of Facts are available on the MFDA website at www.mfda.ca. During the period described in the Notice of Hearing, the Respondent conducted business in the Winnipeg, Manitoba 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 81,000 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.