The Mutual Fund Dealers Association (MFDA) announced that it has approved a settlement agreement between MFDA staff and 27-year industry veteran, David Gordon.
According to the agreement, between November 2009 and May 2016 when Gordon retired, he recommended an investment strategy, known as the Gold Strategy in MFDA documents, to at least six of his clients, without regard for the clients’ ages or their know-your-client (KYC) information.
Documents state that Gordon – who conducted business in the Campbell River, British Columbia area – recommended at least six of his clients concentrate their holdings in precious metals sector funds, based on his views as to how those funds would perform. Most of the clients described in the MFDA documents followed his advice, each concentrating more than half of their modest holdings in gold and precious metals sector funds. In the course of recommending the Gold Strategy, Gordon told his clients that the price of gold and other precious metals were poised to increase dramatically, and that investing in gold and precious metals sector funds was a relatively low-risk investment.
Some of the clients to whom he recommended the strategy were retired, had low investment knowledge, limited income and limited ability to withstand investment losses. All told, the clients described in the settlement agreement lost at least $73,585. FundEX Investments Inc. has since compensated the clients for their losses.
As part of the settlement agreement, Gordon is permanently banned from conducting securities related business in any capacity with any MFDA member firm. He is also ordered to pay a $25,000 fine and MFDA costs of $2,500.
