MFDA Hearing Panel makes findings and issues Decision and Reasons in the matter of Hyun Chul Lee

TORONTO, July 22, 2016 /CNW/ - A Hearing Panel of the Pacific Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA") has issued its Decision and Reasons dated July 20, 2016 (Decision and Reasons") in connection with a disciplinary hearing held in Vancouver, British Columbia on June 17, 2016, in the matter of Hyun Chul Lee (the "Respondent").

The parties filed an Agreed Statement of Facts (the "Agreed Statement of Facts") in which the Respondent admitted to facts constituting contraventions of MFDA Bylaws, Rules or Policies, for which he could be penalized by a Hearing Panel pursuant to section 24.1 of MFDA By-law No. 1. In particular, the Respondent admitted that he:

• between February 2012 and February 2013, engaged in personal financial dealings with clients by, directly or indirectly:

			(a)	borrowing $60,000 from the clients BF and EF, which he invested in a car wash business he owned and operated and then failed to repay in accordance with the terms of the loan;
			(b)	recommending and facilitating an investment of $17,999 by client LA which the Respondent invested in a wholesale food delivery business he owned and operated and then failed to repay;
				thereby placing his own interests ahead of the clients' interests and creating a conflict or potential conflict of interest which the Respondent failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4 and 2.1.1.

• between February 2012 and February 2013, had and continued in other gainful occupations relating to a car wash and wholesale food delivery businesses he owned and operated, which were not disclosed to and approved by the Member, contrary to MFDA Rules 1.2.1(c) (formerly MFDA Rule 1.2.1(d)) and 2.1.1.
  
  
• between February 15, 2013 and January 2, 2015, misled the MFDA and the Member during investigations into his personal financial dealings with clients when he failed to disclose that he had borrowed monies from clients BF and EF, and recommended and facilitated an investment by client LA in a business he owned and operated, thereby failing to cooperate with Staff's investigation, interfering with the Member's ability to conduct a reasonable supervisory investigation of the Respondent's activities and failing to observe high standards of ethics and conduct in the transaction of business, contrary to section 22.1 of MFDA By-law No. 1 and MFDA Rule 2.1.1.

In its Decision and Reasons, the Hearing Panel imposed the following sanctions on the Respondent:

a)	a permanent prohibition to conduct securities related business in any capacity while in the employ of or associated with any MFDA Member;
b)	a fine in the amount of $150,000; and
c)	costs in the amount of $10,000.

Copies of the Decision and Reasons and the Agreed Statement of Facts are available on the MFDA website at www.mfda.ca. During the period described in the Decision and Reasons, the Respondent carried on business in Surrey and Lac La Hache, British Columbia.

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]; Jeff Mount, Vice-President, Pacific Region, 604-694-8846, [email protected]