MFDA issues Notice of Settlement Hearing in respect of Kenneth Russell

TORONTO, March 23, 2022 /CNW/ - The Mutual Fund Dealers Association of Canada (the "MFDA") announced that it has issued a Notice of Settlement Hearing dated March 9, 2022, regarding the presentation, review and consideration of a proposed settlement agreement by a Hearing Panel of the MFDA's Central Regional Council.

The settlement agreement will be between Staff of the MFDA and Kenneth George Russell (the "Respondent") and involves matters for which the Respondent may be disciplined by a Hearing Panel pursuant to MFDA By-laws. The proposed settlement agreement concerns allegations that:

a) between approximately June 2016 and May 2019, the Respondent misrepresented or failed to adequately and accurately explain to two clients who were spouses the tax liability consequences associated with a mutual fund investment that he recommended that the clients purchase in the clients' joint account, thereby failing to ensure that the investment was suitable for the clients and was in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1;

b) between approximately May 2017 and December 2019, the Respondent failed to report to the Member that he received complaints from the two clients who alleged that he had failed to accurately explain the tax liability associated with a mutual fund investment that he had recommended, and directly paid compensation to the complainants in respect of the tax liability without the knowledge or written consent of the Member, contrary to the Member's policies and procedures, MFDA Rules 2.1.4, 2.1.1, 1.4(b), 1.1.2 and 2.5.1, and MFDA Policy No. 3 and MFDA Policy No. 6; and

c) in June 2016, the Respondent completed a Know-Your-Client form on behalf of a client using information obtained from the client's spouse without communicating with the client, thereby failing to use due diligence to:

i. learn and accurately record the essential facts relative to the client;
ii. ensure that orders accepted in respect of the account were within the bounds of good business practice; and
iii. ensure that each order accepted for the account was suitable,

prior to making investment recommendations and accepting investment orders for the client's account, contrary to MFDA Rule 2.2.1 and 2.1.1.

The settlement hearing will take place electronically by videoconference on April 1, 2022, commencing at 10:00 a.m. (Eastern), or as soon thereafter as the matter can be held. Members of the public who would like to obtain particulars should contact [email protected].

MFDA settlement hearings are typically held in the absence of the public pursuant to section 20.5 of MFDA By-law No. 1 and Rule 15.2(2) of the MFDA Rules of Procedure. If the Hearing Panel accepts the settlement agreement, then the proceeding will become open to the public and a copy of the decision of the Hearing Panel and the settlement agreement will be made available at www.mfda.ca.

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

SOURCE Mutual Fund Dealers Association of Canada

Charles Toth, Vice-President, Enforcement, 416-943-4619, [email protected]