MFDA Hearing Panel announces sanctions against Mark Smith and issues Decision and Reasons
TORONTO, ON, Sept. 27, 2021 /CNW/ - A Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA") has issued its Decision (Penalty) and Reasons dated September 24, 2021 ("Decision and Reasons"), in connection with a disciplinary hearing held by electronic hearing in Toronto, Ontario on June 28, 2021, in the matter of Mark Allen Smith ("Respondent").
As previously announced, the Hearing Panel made the following findings of misconduct against the Respondent:
a) |
Between May 27, 2012 and November 12, 2018, the Respondent accepted and acted upon a power of attorney from a related client without notifying the Member and transferring the accounts to another Approved Person in accordance with the Member's requirements, contrary to the Member's policies and procedures and MFDA Rules 2.3.11, 1.1.2, 2.5.1, and 2.1.1. |
b) |
Between September 2012 and November 12, 2018, the Respondent engaged in personal financial dealings with a related client when he acted upon a power of attorney to borrow or otherwise obtain monies from the client's accounts, thereby giving rise to a conflict or potential conflict of interest which the Respondent 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 Member's policies and procedures, and MFDA Rules 2.1.4, 2.3.12, 2.5.1, and 2.1.1. |
c) |
Between 2013 and November 12, 2018, the Respondent provided false or misleading responses to the Member on annual compliance questionnaires relating to accepting a power of attorney or borrowing monies from a related client, contrary to MFDA Rule 2.1.1. |
d) |
In or about March 2016, the Respondent failed to notify the Member within two business days that he had made an arrangement with his creditors, contrary to the Member's policies and procedures, section 4.1(g) of MFDA Policy No. 6, and MFDA Rules 1.2.2(b) 3 [now Rule 1.4], 2.1.1, 2.5.1, and 1.1.2. |
At the hearing on June 28, 2021, the parties made submissions with respect to penalty and the Hearing Panel reserved its decision. In its Decision and Reasons, the Hearing Panel has imposed the following sanctions on the Respondent:
- 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 $140,000; and
- costs in the amount of $5,000.
A copy of the Decision (Penalty) and Reasons is available on the MFDA website at www.mfda.ca. During the period described in the Decision (Penalty) and Reasons, the Respondent conducted business in the Toronto, 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 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.
1 MFDA Rule 2.3.1 was amended effective July 19, 2017. The Respondent's conduct contravened the Rule as it existed both prior to and after the amendment.
2 See Note 1.
3 On March 17, 2016, MFDA Rule 1.2.2(b) was renumbered to MFDA Rule 1.4(b). The content of the Rule did not change.
SOURCE Mutual Fund Dealers Association of Canada
Charles Toth, Vice-President, Enforcement, 416-943-4619, [email protected]
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