MFDA Hearing Panel issues Reasons for Decision (Misconduct) in the matter of Michael Harrigan
TORONTO, Nov. 28, 2018 /CNW/ - A Hearing Panel of the Atlantic Central Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA") has issued its Reasons for Decision (Misconduct) dated November 28, 2018 ("Reasons for Decision") in connection with a disciplinary hearing held in Halifax, Nova Scotia on September 21-22, 25, 28-30, October 1-2, 8, 2015, January 11-15, April 18-19, June 15, December 20-22, 2016 in the matter of Michael Andrew Harrigan ("Respondent").
In its Reasons for Decision, the Hearing Panel outlines its reasons for its findings of misconduct against the Respondent. In particular, the Respondent:
a) |
between 2005 and 2008, misrepresented the Know-Your-Client information on the account opening and loan application documents of six clients, thereby engaging in conduct unbecoming an Approved Person and failing to observe high standards of ethics and practice in the conduct of business, contrary to MFDA Rules 2.2.1 and 2.1.1. |
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b) |
between 2005 and 2008, misrepresented, failed to fully and adequately explain, or omitted to explain, the risks, benefits, material assumptions, costs and features of a leveraged investment strategy that he recommended and implemented in the accounts of six clients including the risks that: |
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i. |
the underlying investments might decline in value such that the clients might incur investment losses and would be unable to rely on the sale proceeds of the investments to pay back their investment loans; and |
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ii. |
the underlying investments might reduce, suspend or cancel altogether the distributions paid to investors upon which the clients were relying to make the payments on their investment loans, |
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thereby failing to ensure that the leveraged investment strategy was suitable and appropriate for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1 |
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c) |
between 2005 and 2008, recommended and facilitated the implementation of a leveraged investment strategy in the accounts of six clients without performing the necessary due diligence to learn the essential facts relative to the clients and without ensuring that the leveraged investment strategy was suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1. |
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Submissions with respect to penalty will take place on a date to be determined and announced accordingly. The proceeding will continue to be open to the public, except as may be required for the protection of confidential matters.
A copy of the Reasons for Decision (Misconduct) is available on the MFDA website at www.mfda.ca. During the period described in the Reasons for Decision (Misconduct), the Respondent carried on business in Dartmouth, Nova Scotia.
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 82,000 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]
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