December 21, 2020 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) has commenced disciplinary proceedings in respect of Tuomo Tapio Kostamo (the “Respondent”). In its Notice of Hearing dated December 15, 2020 (“Notice of Hearing”), Staff of the MFDA alleges that the Respondent engaged in the following conduct contrary to the By-laws, Rules and/or Policies of the MFDA:
Allegation #1: Commencing in 2016, the Respondent recommended that approximately 25 clients concentrate all, or a substantial portion, of their account holdings in precious metals sector mutual funds at a level of concentration that exceeded concentration limits permitted by the Member, contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.2.1, 2.5.1, and 1.1.2.
Allegation #2: Commencing in 2016, the Respondent inaccurately recorded purchases by clients of precious metals sector mutual funds as unsolicited when the Respondent recommended the purchases to the clients, contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.2.1, 2.5.1 and 1.1.2.
Allegation #3: Between August 2016 and November 2018, the Respondent recommended that client JG invest all, or a substantial portion, of client JG’s investable assets in precious metals sector mutual funds without using due diligence to ensure that:
- investment recommendations that he made to client JG were suitable having regard to the client’s essential Know Your Client information; and
- he adequately informed client JG about the risks of holding investments concentrated in precious metals sector mutual funds,
contrary to the policies and procedures of the Member and MFDA Rules 2.2.1, 2.1.l, 2.5.1 and 1.1.2.
The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA’s Pacific Regional Council on February 26, 2021 at 10:00 a.m. (Pacific), or as soon thereafter as the appearance can be held, to schedule a date for the commencement of the hearing on the merits and to address any other procedural issues. The appearance will be open to the public, except as may be required for the protection of confidential matters. Members of the public who would like to listen to the teleconference should contact firstname.lastname@example.org to obtain particulars. The Hearing on the Merits will take place in Vancouver, British Columbia.
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 Prince George, British Columbia 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.