January 25, 2017 (Toronto, Ontario) – A settlement hearing in the matter of Quadrus Investment Services Ltd. (the “Respondent”) was held on January 20, 2017 in Toronto, Ontario before a three-member Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”).
The Hearing Panel accepted the settlement agreement (the “Settlement Agreement”) between Staff of the MFDA and the Respondent, as a consequence of which the following penalties and costs were imposed:
- a fine in the amount of $75,000;
- costs in the amount of $20,000; and
- shall in future comply with MFDA Rules 2.1.1, 2.1.4, 2.3.1 and 2.5.1, and MFDA Policy No. 6.
In the Settlement Agreement, the Respondent admitted that:
- between March 2009 and July 2015, it failed to employ adequate supervision to prevent Approved Person RM from engaging in discretionary trading, engaging in personal financial dealings with clients, and using pre-signed account forms, contrary to MFDA Rules 2.1.1, 2.1.4, 2.3.1 and 2.5.1;
- it failed to report to the MFDA, within five (5) business days or at all:
- the Respondent’s discoveries in March 2009 and September 2010, that Approved Person RM had, or may have, engaged in discretionary trading; and
- the Respondent’s discovery in September 2010, that Approved Person RM had, or may have, engaged in personal financial dealings with clients.
contrary to MFDA Policy No. 6, subsections 6.1(b)(i) and (v).
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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