A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) has issued its decision and reasons in the matter of Mark Allen Smith, a former Investors Group Financial Services Inc. dealing representative accused of abusing his position when his mother appointed him to be her power of attorney (POA).
According to the decision, between May 2012 and November 2018, Smith accepted and acted upon a POA from a related client – his mother – without notifying Investors Group and transferring her accounts to another approved person. He engaged in personal financial dealings when he used the POA to borrow money from his mother’s accounts and her lines of credit, and between 2013 and 2018 he provided false or misleading responses to Investors Group on annual compliance questionnaires. Finally, Smith also failed to notify the firm within two business days after filing a consumer proposal pursuant to the Bankruptcy and Insolvency Act which proposed an arrangement with his creditors for the payment of his personal debts.
The MFDA’s decision states that Smith’s mother was 88 years old, suffering from health problems and grieving the loss of her husband when she appointed her son. “The respondent began financially exploiting Client CS/his mother within four months of his appointment and continued undetected for more than four years,” they write. “As admitted by the respondent in the agreed statement of facts, he used the money to support his gambling activities, pay his personal expenses and to otherwise fund his lifestyle.” All told, Smith withdrew $149,358 from his mother’s accounts, repaying only $54,358. Interest accrued on her lines of credit, as of January 2020, totalled approximately $27,000.
In addition to being permanently prohibited from conducting securities related business in any capacity with any MFDA member firm, Smith must also pay a fine in the amount of $140,000 and costs in the amount of $5,000. According to the decision, “the fine shall be reduced by any and all amounts the respondent repays to his client CS/his mother or her estate if appropriate, up to a maximum of $122,000 before December 31, 2022.”
