W.H. Stuart Mutuals Ltd. and Marilyn Dianne Stuart

TORONTO, Aug. 8, 2013 /CNW/ - As previously announced, an MFDA Hearing Panel ordered the suspension of membership of W. H. Stuart Mutuals Ltd. ("W. H. Stuart") on May 31, 2013 and made other related Orders against W. H. Stuart and Dianne Stuart during the period April to May, 2013.

The Hearing Panel issued its Reasons for Decision (Orders) ("Reasons") in connection with those Orders on August 1, 2013. In its Reasons, the Hearing Panel stated that the orders were made in part to enable MFDA Staff to secure documentation to allow a full investigation. To view the Reasons or other documents issued by the Hearing Panel in this matter, see http://www.mfda.ca/enforcement/cases13/201308.html.

As noted in the Reasons, MFDA Staff is investigating situations where it appears that:

• Unauthorized redemptions were processed in client accounts that had an inactive trading history, without the clients' knowledge or approval. The unauthorized redemptions were not reported to the clients or the Approved Persons at W. H. Stuart who ordinarily serviced the client accounts. The proceeds may have been deposited into the bank account of a W. H. Stuart affiliate or used for other purposes.

• Clients and other individuals were solicited to purchase investment notes or similar instruments issued by W. H. Stuart or an affiliate that purported to offer an annual return of 7%, or other interest rate, to investors. These notes may have been marketed by unregistered individuals.

• In multiple instances cash positions in client accounts at least temporarily do not appear on account records of W. H. Stuart; and

• During the process of transferring accounts from W. H. Stuart to third party dealers and other financial institutions, the redeemed proceeds of the account were deposited into the operating bank account of a W. H. Stuart affiliate and potentially used for the benefit of W. H. Stuart or its affiliates.

W. H. Stuart has ceased conducting business with its clients and appears to be insolvent.

Information for W. H. Stuart Clients from the MFDA Investor Protection Corporation

The accounts of clients of W. H. Stuart were transferred to Keybase Financial Group Inc. (Keybase) effective June 1, 2013. Most Approved Persons of W. H. Stuart who handle client accounts have become Approved Persons of Keybase. If you have questions about your account, you can contact your financial advisor or the head office of Keybase.

Keybase has prepared and mailed customer statements for the month end June 30, 2013. Former clients of W. H. Stuart have been asked to carefully check their account statements to ensure the transfer of assets from W. H. Stuart is complete. It appears that the vast majority of assets in client accounts were transferred in their entirety from W.H. Stuart to Keybase. However, where it appears that may not have been the case or that there may be other discrepancies in client accounts, letters to the clients involved will be sent out by the MFDA Investor Protection Corporation (MFDA IPC) this week.

If you are a former client of W. H. Stuart who had assets remaining in your account and you did not receive a statement from Keybase and you do not receive a letter from the MFDA IPC by August 30, 2013, please access the customer Proof of Claim Form at http://www.mfda.ca/ipc/WHStuart.html.

SOURCE: Mutual Fund Dealers Association of Canada

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