MFDA Releases Annual Enforcement Report 2013

TORONTO, March 27, 2014 /CNW/ - Coinciding with Fraud Prevention Month, the MFDA is releasing its Annual Enforcement Report for 2013 which highlights the MFDA's enforcement activities in combating fraud and other regulatory breaches.

The report includes information about how the MFDA Enforcement Department operates as well as summarized examples of key achievements and several significant disciplinary cases completed in 2013.

"The results presented in this report are the culmination of our continued execution of the MFDA Strategic Plan and its goals of increased operational efficiencies while promoting Member and Approved Person compliance and increasing investor confidence. The results and achievements set out in this report are not only the products of the efforts of the Enforcement Department, but of the collaborative efforts of all MFDA departments and staff working together" said Mark T. Gordon, MFDA President & CEO.

Highlights of the MFDA's Annual Enforcement Report 2013 include:

• The total number of formal disciplinary proceedings commenced by the MFDA rose on an annual basis. The MFDA commenced 65 disciplinary hearings in 2013, an increase from 48 hearings in 2012 and a significant increase from 36 in 2011;
  
  
• Forty-seven hearings were concluded in 2013 resulting in 21 permanent prohibitions and 11 suspensions.  The concluded hearings also resulted in fines of $10,850,500 and costs of $243,500 against Approved Persons and Members;
  
  
• A continued focus on complaints that involve Seniors (defined by the MFDA as investors 60 years of age and over), as well as other vulnerable groups such as investors with limited resources or language, literacy or disability issues;
  
  
• The continued use of the fast track procedure allowed several cases to proceed to a disciplinary hearing on an expedited basis in circumstances where there may be a risk of ongoing harm to the public. The bulk track procedure, which allows routine cases to be brought to a hearing using fewer resources, was used to conduct a focused initiative to increase the formal disciplinary response in cases against Approved Persons who used blank signed forms or falsified client signatures ostensibly for client convenience. The use of this bulk track procedure led to a significant increase in the number of proceedings commenced in relation to this activity in 2013; and
  
  
• The launch of a Whistleblower Program in early 2014 to receive information from individuals with knowledge or evidence of potential wrongdoing by MFDA Approved Persons or Members. The Whistleblower Program will assist the MFDA with the early identification of and effective regulatory response to potential fraud and other misconduct, so as to minimize harm or the risk of harm to the public.

The Annual Enforcement Report 2013 is now available on the MFDA's website at www.mfda.ca.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 111 Members and their approximately 80,000 Approved Persons with a mandate to protect investors and the public interest.

SOURCE: Mutual Fund Dealers Association of Canada

Shaun Devlin, Senior Vice-President, Member Regulation - Enforcement, [phone] or [email protected]