The Mutual Fund Dealers Association of Canada has permanently prohibited Ken David Derksen from conducting securities related business in any capacity while employed by any MFDA member firm after a hearing panel found that Derksen engaged in personal financial dealings with a client and misappropriated the client’s funds. The MFDA came to the conclusion without Derksen’s help or participation, and the regulator further found that he failed to cooperate with an investigation by MFDA staff into his conduct.
In addition to the permanent ban, Derksen was also fined $315,000 and assessed costs in the amount of $10,000.
According to the MFDA’s notice of hearing, the Victoria, British Columbia dealing representative was registered with Investors Group Financial Services Inc. from August 2007 until May 2020 when the firm terminated him after receiving the affected client’s complaint.
In short, Derksen accepted access to a client’s personal bank account to manage the client’s financial affairs while the client traveled outside of Canada. He then used this access to conduct at least 71 transactions, misappropriating $155,800, of which $114,951 has not been recovered or returned to the client.
During the client’s absence, Derksen also told the client that the value of his accounts was higher than the actual value of holdings in the accounts. When Derksen finally disclosed that the client’s holdings were significantly lower than the value he’d previously reported, the client reported Derksen to the firm, which in turn reported the representative to the MFDA.
During the course of its investigation, Derksen then failed to respond to multiple emails, serviced letters and requests for an interview.
“Due to the respondent’s failure to cooperate with staff’s investigation, staff has not been able to determine the full nature and extent of the respondent’s conduct, including,” they add, “whether he engaged in similar conduct with additional clients or other individuals.”
The MFDA says it will issue its written reasons in due course.
