TORONTO, Sept. 13, 2019 /CNW/ - A settlement hearing in the matter of FundEX Investments Inc. ("Respondent") was held on September 12, 2019 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 August 15, 2019 ("Settlement Agreement") between Staff of the MFDA and the Respondent, as a consequence of which the following sanctions were imposed on the Respondent:
In the Settlement Agreement, the Respondent admitted that:
between June 2011 and April 2012, it failed to adequately supervise its Approved Person Christopher Singer's recommendation to a client for the purchase of an exempt market product, which recommendation was unsuitable for the client having regard to concentration and the client's Know-Your-Client information, including but not limited to the client's investment knowledge and experience, and time horizon, contrary to MFDA Rules 2.2.1 and 2.1.1;
between November 2007 and approximately February 2014, it did not have adequate procedures in place to monitor all of the holdings in its client accounts held at Canadian Western Trust, and did not identify the sale of unapproved products in the accounts of two clients, contrary to MFDA Rule 2.5.1;
commencing in 2011, it failed to ensure that complaints from two clients regarding its Approved Persons Stuart Henschel and William Cormylo, were handled fairly, contrary to MFDA Rule 2.11 and MFDA Policy No. 3;
between June 2013 and April 2017, it failed to conduct adequate supervisory investigations to review and resolve suitability and concentration of precious metal sector funds concerns it identified in client accounts serviced by four Approved Persons, contrary to MFDA Rules 2.2.1 and 2.5.1;
between March 28, 2016 and May 1, 2018, it failed to ensure that a complaint from a client regarding its Approved Person Ronald Schwartz was handled fairly, contrary to MFDA Rule 2.11 and MFDA Policy No. 3; and
between August 2009 to November 2013, it maintained a branch review program that did not ensure that in all instances an on-site compliance review of all of its branches was conducted at least once every three years, in accordance with MFDA Policy No. 5 and MFDA Rule 2.5.1.
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.
SOURCE Mutual Fund Dealers Association of Canada
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