June 21, 2021 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Sean Preston Davidson (“Respondent”) by Notice of Hearing dated November 11, 2020.
A disciplinary hearing in this proceeding was held today by electronic hearing, before a three-member Hearing Panel of the MFDA’s Central Regional Council. After receiving evidence and hearing submissions by Staff of the MFDA, the Hearing Panel found that the three allegations set out in the Notice of Hearing had been established. In particular, the Hearing Panel made the following findings of misconduct:
Allegation #1: In or about February 2014, the Respondent engaged in personal financial dealings with a client when he borrowed or otherwise accepted approximately $18,000 from one or more clients, which gave rise to a conflict or potential conflict of interest which he failed to disclose to the Member or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the policies and procedures of the Member, and MFDA Rules 2.1.4, 2.1.1, 2.5.1 and 1.1.2.
Allegation #2: Between 2014 and 2017, the Respondent submitted three annual compliance questionnaires to the Member that contained false or misleading responses, thereby interfering with the ability of the Member to supervise the Respondent’s activities, engaging in conduct detrimental to the public interest, and failing to observe high standards of ethics and conduct in the transaction of business, contrary to MFDA Rule 2.1.1.
Allegation #3: Between January 2015 and January 2017, the Respondent failed to disclose to the Member that he had filed a consumer proposal in January 2015, contrary to the Member’s policies and procedures, and MFDA Rules 2.1.1, 1.2.2(b) (now 1.4(b)), 2.5.1 and 1.1.2, and s. 4.1(g) of MFDA Policy No. 6.
Following submissions from Staff of the MFDA with respect to penalty, the Hearing Panel reserved its judgment and advised that it will issue its written decision and provide its reasons in due course.
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 80,000 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.