MFDA Hearing Panel makes findings of misconduct and imposes sanctions against Ken Derksen

TORONTO, Dec. 9, 2022 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of Ken David Derksen (the "Respondent") by Notice of Hearing dated May 6, 2022 (the "Notice of Hearing").

A disciplinary hearing in this proceeding was held electronically by videoconference on December 7, 2022 before a three-member Hearing Panel of the MFDA's Pacific Regional Council. After receiving evidence and hearing submissions from Staff of the MFDA with respect to misconduct, the Hearing Panel made the following findings against the Respondent:

a)  Between November 2016 and May 13, 2020, he misappropriated or otherwise failed to account for client monies, contrary to MFDA Rules 2.1.1.

b)  Between November 2016 and May 13, 2020, he engaged in personal financial dealings with a client which gave rise to a conflict or potential conflict of interest that he 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 policies and procedures of the Member and MFDA Rules 2.1.4,¹ 2.1.1, 2.5.1 and 1.1.2.

c)  Commencing in June 2020, he failed to cooperate with an investigation by MFDA Staff into his conduct, contrary to section 22.1 of MFDA By-Law No. 1.

Following submissions from Staff of the MFDA with respect to penalty, the Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons in due course:

• 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 $315,000; and
• costs in the amount of $10,000.

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 carried on business in the Victoria, British Columbia 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 76,695 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.

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¹On June 30, 2021, MFDA Rule 2.1.4 was amended to conform with client focused reform amendments to National Instrument 31-103 that came into effect on the same day.  As the conduct addressed in this Notice of Hearing pre-dated the amendment to this Rule, Allegation #2 concerns the alleged contravention of the version of the Rule that was in effect between February 27, 2006 and June 30, 2021.

SOURCE Mutual Fund Dealers Association of Canada

Charles Toth, Vice-President, Enforcement, 416-943-4619, [email protected]; Jeff Mount, Vice-President, Pacific Region, 604-694-8846, [email protected]