February 8, 2019 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Robert William Copland (“Respondent”) by Notice of Hearing dated June 20, 2018.
A disciplinary hearing in this proceeding was held on January 29, 2019 in Toronto, Ontario before a three-member Hearing Panel of the MFDA’s Central Regional Council. After receiving evidence and hearing submissions from Staff of the MFDA, the Hearing Panel found that the five allegations set out in the Notice of Hearing had been established. In particular, the Hearing Panel made the following finding of misconduct:
Allegation #1: Between about June 2013 and October 2015, the Respondent recommended, sold or facilitated investments by four clients in a retail coffee shop business, thereby engaging in securities related business outside the Member, contrary to MFDA Rules 1.1.1 and 2.1.1.
Allegation #2: Between about June 2013 and October 2015, the Respondent engaged in outside business activities with respect to one or more coffee businesses, without the knowledge or approval of the Member, contrary to the Member’s policies and procedures, and MFDA Rules 1.2.1(c) (now MFDA Rule 1.3), 2.5.1, 1.1.2, and 2.1.1.
Allegation #3: Between about June 2013 and October 2015, the Respondent engaged in personal financial dealings with clients when he, among other things:
- established or operated a non-arm’s length coffee business with a client;
- opened a joint bank account with a client in respect of a non-arm’s length coffee business;
- recommended, sold or facilitated investments by clients in a retail coffee shop business;
- arranged for a client to loan monies to a non-arm’s length coffee business;
- arranged for or accepted a personal loan from a client; or
- accepted payments from a client and/or made payments to a client relating to one or more non-arm’s length coffee businesses;
thereby giving rise to a conflict or potential conflict of interest which the Respondent failed to disclose to the Member, or failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to the Member’s policies and procedures, and MFDA Rules 2.1.4, 2.5.1, 1.1.2, and 2.1.1.
Allegation #4: On or about May 31, 2014, the Respondent misrepresented himself as a client’s property manager in a letter submitted in support of the client’s application to unlock a pension on the basis of financial hardship, thereby failing to observe a high standard of conduct and ethics in the transaction of business, or engaging in conduct which is unbecoming or detrimental to the public interest, contrary to MFDA Rule 2.1.1.
Allegation #5: Commencing May 29, 2017, the Respondent failed to cooperate with an investigation by MFDA Staff into his conduct, contrary to section 22.1 of MFDA By-law No. 1.
After hearing submissions from Staff of the MFDA as to penalty, the Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons in due course:
- a permanent prohibition from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member;
- a fine in the amount of $175,000; and
- costs in the amount of $7,500.
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 conducted business in the Bowmanville, Ontario 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.