MFDA announces disciplinary proceeding in respect of Charles Martin

TORONTO, April 25, 2016 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") has commenced disciplinary proceedings in respect of Charles Albert Martin (the "Respondent"). In its Notice of Hearing dated March 21, 2016, 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: Between November 2003 and September 2013, the Respondent, directly or indirectly through a corporation he controlled, solicited and accepted service fees outside the Member from at least 120 clients in respect of Member business, thereby accepting remuneration payable to the Member only, and failing to deal fairly, honestly and in good faith with the clients and engaging in business conduct or a practice which was unbecoming or detrimental to the public interest, contrary to MFDA Rules 2.4.1(a) and 2.1.1.  

Allegation #2: Between November 2003 and September 2013, the Respondent, directly or indirectly through a corporation he controlled, solicited and accepted service fees outside the Member from at least 120 clients, without adequately informing the clients that he would also receive commissions, trailer fees and other remuneration from the Member for the same activities for which he charged the service fees to clients, thereby engaging in conduct giving rise to a conflict or potential conflict of interest between the Respondent and the clients which the Respondent failed to disclose to the Member and ensure was addressed by the exercise of responsible business judgment influenced only the best interests of the client, and failing to deal fairly, honestly and in good faith with the clients and engaging in business conduct or a practice which was unbecoming or detrimental to the public interest, contrary to MFDA Rules 2.1.4 and 2.1.1.

Allegation #3: Between November 2003 and September 2013, the Respondent, directly or indirectly through a corporation he controlled, solicited and accepted service fees outside the Member from at least 120 clients, which were excessive having regard to the fact that he had also received commissions, trailer fees and other remuneration from the Member for the same activities for which he charged the service fees to clients, thereby engaging in conduct giving rise to a conflict or potential conflict of interest between the Respondent and the clients which the Respondent failed to disclose to the Member and ensure was addressed by the exercise of responsible business judgment influenced only the best interests of the client, and failing to deal fairly, honestly and in good faith with the clients and engaging in business conduct or a practice which was unbecoming or detrimental to the public interest, contrary to MFDA Rules 2.1.4 and 2.1.1.

Allegation #4: Between February 6, 2013 and September 20, 2013, the Respondent disregarded directives from the Member to cease charging service fees or engaging in fee for service activities with clients outside the Member, and then mislead the Member about accepting service fees and engaging in fee for service activities with clients, thereby interfering with the ability of the Member to supervise the Respondent and comply with its obligations under MFDA Rule 2.9 and MFDA Policy No. 4, contrary to MFDA Rules 1.1.2, 1.1.5, 2.10 and 2.1.1.

Allegation #5: On May 29, 2014, the Respondent mislead Staff during the course of its investigation when he falsely stated during an interview with Staff that he had ceased charging service fees to clients in December 2012, contrary to section 22.1 of MFDA By-law No. 1.

Allegation #6: Between 2004 and September 20, 2013, the Respondent solicited clients JM and DM to appoint a corporation that he controlled as a trustee in the clients' Will, and thereafter failed to renounce or disclose the appointment to the Member, thereby giving rise to a conflict or potential conflict of interest between the Respondent and clients JM and DM which he failed to address by the exercise of responsible business judgment influenced only by the best interests of clients JM and DM, contrary to MFDA Rules 2.3.1, 2.1.4 and 2.1.1.

The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA's Central Regional Council on May 24, 2016 at 10:00 a.m. (Eastern), or as soon thereafter as the appearance can be held, in order to schedule a date for the commencement of the hearing on the merits and to address any other procedural matters. The first appearance will be open to the public, except as may be required for the protection of confidential matters.

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 Kitchener, Ontario.

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 83,000 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

Charles Toth, Director, Litigation, 416-943-4619, [email protected]