The Mutual Fund Dealers Association of Canada (MFDA) published its 2019 Annual Enforcement Report on May 12.
Top primary allegations made in cases opened during the year include allegations that representatives obtained and sometimes used pre-signed account forms – 94 of the 453 allegations made in total involved pre-signed forms. The report says the MFDA will continue to address these cases as a priority.
Investment suitability
The MFDA also opened 38 cases where investment suitability allegations were the primary allegation and another 38 cases where business standards were allegedly breached. Other primary allegations made in cases opened at case assessment in 2019 include unauthorized or discretionary trading (26 cases); signature falsification (18 cases); forgery fraud, theft or misappropriation (13 cases); plus another 12 cases where falsification or misrepresentation was the nature of the primary allegation.
One third of cases involved seniors or vulnerable persons
All told, the association opened 453 cases during the year. The MFDA says 32 per cent of proceedings commenced in 2019 involved seniors or vulnerable persons.
The MFDA also closed 503 cases and completed 120 disciplinary proceedings during the year. Concluded hearings resulted in 22 permanent prohibitions and 56 suspensions. The regulator also issued total fines of $9,298,603 and costs totaling $558,425 against members and approved persons during the year. Compared to a year earlier, fines were up considerably compared to the $6,080,031 in fines issued in 2018. Total costs imposed came in slightly lower compared to the $592,000 imposed in 2018.
14 per cent of fines collected
Since the MFDA commenced disciplinary activity in 2004, MFDA hearing panels have imposed total fines of $96,996,845 of which only 14 per cent or $13,734,026 has been collected.
Going forward, the MFDA says supervision, complaint handling and cases involving seniors and vulnerable persons will continue to be enforcement priorities for the association’s enforcement department. It will also continue to ensure that cases involving criminal misconduct are referred to law enforcement.
