MFDA Hearing Panel approves settlement agreement with Kenneth Showalter

TORONTO, March 7, 2019 /CNW/ - A settlement hearing in the matter of Kenneth Richard Showalter ("Respondent") was held today 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 February 11, 2019 ("Settlement Agreement") between Staff of the MFDA and the Respondent, as a consequence of which the following sanctions were imposed on the Respondent:

•	a fine in the amount of $18,000, payable in instalments as follows:
	i.	$6,000 upon acceptance of the Settlement Agreement;
	ii.	$2,000 payable on the first day of each month from April 1, 2019 to September 1, 2019; and
•	costs in the amount of $5,000.

In the Settlement Agreement, the Respondent admitted that:

a)

between September and December 2015, he received a complaint from his client NB verbally and in writing that he failed to report to the Member and without the prior written authorization of the Member, he paid compensation to his client NB to resolve her complaint, contrary to section 4.1(a) of MFDA Policy No. 6, sections 9-1, 9-2 and 10 of MFDA Policy No. 3, MFDA Rules 2.1.1, 2.1.4, 2.5.1 and 1.1.2 and the policies and procedures of the Member; and

b)

in May 2016, he engaged in discretionary trading by processing three trades in the investment accounts of his client NB without first obtaining instructions from the client with respect to all elements of the trades, contrary to former MFDA Rules 2.3.1(a) [now MFDA Rule 2.3.1(b)] [1], 2.1.1, 2.10 and 1.1.2 and the policies and procedures of the Member.

^1On January 19, 2017, MFDA Rule 2.3.1 was amended.  The prohibition on discretionary trading was moved from MFDA Rule 2.3.1(a) to MFDA Rule 2.3.1(b).

A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca. During the period described in the Settlement Agreement, the Respondent conducted business in Courtice, 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 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

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

Related Links

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