The Mutual Fund Dealers Association of Canada (MFDA) has permanently banned former mutual fund salesperson, Blaise Leslie Szekely and has ordered Szekely to pay $155,000 in fines and costs.
In its decision and reasons document, the MFDA outlined its allegations against Szekely, saying the former fund rep defied his firm’s rules and MFDA rules when he solicited approximately $287,542 from clients for investment outside of the firms where he worked. In addition to engaging in securities related business outside of the member firm’s facilities, he also engaged in personal financial dealings with two clients when he solicited approximately $10,000 for a joint investment, with himself and his mother, in a private investment club again operated outside of the member dealer firm.
According to the documents, the Edmonton rep, formerly registered with Professional Investment Services (Canada) Inc., Global Maxfin Investments Inc., and Sterling Mutuals Inc., took $197,542 from two clients, guaranteed their principal and regular interest payments, but only returned $95,000. He similarly took another $80,000 from the clients he was in an investment club with, guaranteed returns each month and a return of their principal. Szekely has since failed to repay or account for any of the money invested with him. Szekely had been registered in the mutual fund industry since 1997. Sterling terminated his mutual fund registration in January 2017.
In its decision, the MFDA says a significant financial penalty “is necessary to communicate to other approved persons that engaging in securities related business outside of the members, failing to account for monies invested, as well as engaging in personal financial dealings is serious misconduct that has no place in the mutual fund industry,” they write. “This hearing panel considers that the misconduct in the present case, although not fraudulent and not involving borrowing money from the client, remains within the category of the most serious type of misconduct which an approved person can commit, namely, engaging in securities related business outside of the member’s approval.”
All told, Szekely will pay $100,000 for the allegations against him, $50,000 for failing to cooperate with MFDA staff, and $5,000 in costs. He is also permanently prohibited from working in any securities related capacity with any MFDA-member firm.