August 29, 2018 (Toronto, Ontario) – A settlement hearing in the matter of Global Maxfin Investments Inc. (the “Respondent”) was held yesterday 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 approved the settlement agreement dated June 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 fine in the amount of $35,000;
- costs in the amount of $10,000; and
- shall in future comply with MFDA Rules, 2.1.4, 2.2.1, 2.3.1, 2.5, 2.9 and 2.10 and MFDA Policy No. 2.
In the Settlement Agreement, the Respondent admitted that between December 2011 and January 2015, it failed to:
- establish, implement and maintain adequate internal controls to supervise the activities of its Approved Person IC and the client accounts for which IC was the servicing dealing representative so as to:
- detect and prevent unusual trading patterns by IC such as excessive trading, excessive switching and market timing;
- detect and prevent discretionary trading by IC;
- conduct a reasonable supervisory investigation of IC activities after becoming aware that IC maintained and used pre-signed client forms to process transactions in client accounts; and
- ensure that the handling of the Respondent’s business was in accordance with the By-laws, Rules and Policies of the MFDA and applicable securities legislation; and
- maintain adequate records of trade supervision undertaken including inquiries made, responses received and follow-up action taken;
contrary to MFDA Rules, 2.1.4, 2.2.1, 2.3.1, 2.5, 2.9 and 2.10 and MFDA Policy No. 2.
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.