MFDA fines two advisors for failing to get client initials on changed forms

In two separate cases, the Mutual Fund Dealers Association of Canada (MFDA) has accepted settlement agreements and issued fines to advisors who altered account forms without getting clients to initial the alterations.  

In one instance, a Toronto-area branch manager with Desjardins Financial Security Inc., Ping-Chung Peter Chiu has been fined $16,000 plus costs totaling $2,500 and is permanently banned from acting as a branch manager or in any supervisory capacity going forward. In the MFDA’s settlement agreement, Chiu admitted that, as branch manager, he approved the use of 27 altered account forms for two approved persons under his supervision between February 2014 and February 2017. Between July 2014 and October 2016 he also altered and used four account forms for three different clients without having the client initial the alterations.  

Chiu was previously the subject of another MFDA settlement hearing in October 2017 when he was sanctioned for changing a client’s banking information and for processing redemptions in the client’s account, based on email instructions without first obtaining signed account forms authorizing the changes or verifying that he was communicating with the client. In this case, the instructions were in fact from a third party who had gained unlawful access to that client’s email.  

In a second case, the MFDA fined Cambridge, Ontario, Investia Financial Services Inc. advisor, Marilyn Audrey Kennedy, $15,000 plus costs totaling $2,500 after Kennedy admitted she obtained and used eight pre-signed account forms for seven different clients between August 2017 and September 2018. Between August 2017 and October 2018 she also altered and used 38 account forms for 31 different clients by altering account information without having the clients initial the alterations.  

Discovered during a branch review and subsequent investigation, the altered information included account numbers and fund codes. Investia placed Kennedy under close supervision between February and July 2019, and issued a warning letter to the representative in July 2019. Kennedy has not previously been the subject of any MFDA disciplinary proceedings.