MFDA Hearing Panel approves settlement agreement with Edward Clairmont
November 26, 2018 (Toronto, Ontario) – A settlement hearing in the matter of Edward Paul Clairmont (“Respondent”) took place on November 23, 2018 in Toronto, Ontario before a three-person Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”).
The Hearing Panel approved the settlement agreement dated November 14, 2018 (“Settlement Agreement”) between Staff of the MFDA and the Respondent, as a consequence of which the following sanctions were imposed on the Respondent:
- a prohibition from conducting securities related business in any capacity while in the employ of or associated with a MFDA Member for a period of 18 months;
- a fine in the amount of $50,000;
- costs in the amount of $5,000;
- shall write or rewrite and pass the Ethics and Professionalism Conduct Course offered by the IFSE Institute prior to being re-registered in the mutual fund industry; and
- shall in the future comply with MFDA Rules 1.1.1, 2.1.1, 2.3.1(b) and 2.5.1 and 1.1.2.
In the Settlement Agreement, the Respondent admitted that:
- between August 1, 2016 and December 31, 2016, he arranged for 344 clients to execute new account application forms and Know-Your-Client forms to transfer the clients to a new Member, when he was not registered with the new Member, thereby engaging in registrable activity and securities related business outside the scope of his registration, contrary to MFDA Rules 1.1.1 and 2.1.1;
- between August 1, 2016 and December 31, 2016, he had 344 clients execute 829 undated new account application forms, Know-Your-Client forms, and transfer authorizations, which were later signed by another Approved Person registered with the new Member to effect the transfers, contrary to MFDA Rule 2.1.1;
- between 2012 and 2016, he obtained, maintained, and/or used at least:
- 46 pre-signed account forms;
- 16 accounts forms which were altered after the client had signed the forms; and
- 1 account form on which the client’s signature had been copied and pasted from another form,
contrary to the Member’s policies and procedures and MFDA Rules 2.1.1 and 2.5.1 and 1.1.2;
- from 2012 to 2016:
- falsely certified each year on the Member’s annual registration renewals that he did not have in his possession or control any pre-signed forms; and
- failed to disclose to his Member on the 2016 Annual Audit Questionnaire his arrangement to share office space with another Approved Person,
contrary to MFDA Rule 2.1.1; and
- in or around November 2016, he engaged in 129 instances of discretionary trading, contrary to his Member’s policies and procedures and MFDA Rules 2.3.1(b), 2.1.1, 2.5.1, and 1.1.2.
A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca. During the period described in the Settlement Agreement, the Respondent conducted business in Tecumseh, Ontario.
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 82,000 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.