Multiple advisors fined for using pre-signed forms

The Mutual Fund Dealers Association of Canada (MFDA) has approved settlement agreements in two cases and issued it reasons for decision in a third case where advisors used pre-signed forms to process transactions and altered client account forms without having the client initial alterations.

Under the settlement agreements, Perry Richard Graham and Shawn Culliton were fined $22,500 and $16,500 respectively. Each was additionally assessed costs of $2,500.  In their respective settlement agreements, Graham admitted that he obtained and sometimes used 49 pre-signed account forms for 30 clients while Culliton admitted that he obtained and sometimes used 112 pre-signed account forms for 32 different clients.

Graham also admitted that he altered forms 124 times for 66 different clients without having clients initial the alterations while Culliton admitted the same, saying he altered five account forms for five different clients without having client initial the alterations.

Placed under strict supervision

Both representatives are currently registered with FundEX Investments Inc. Both have been placed under strict supervision by their firm. In both cases the firm also imposed a monthly financial penalty of $625. As of September 2019 $8,125 plus $1,010 in administrative fees to cover the cost of client mailings had been deducted from Graham’s commissions. As of November 2019, $11,875 plus $1,047 in administrative fees have been deducted from has been deducted from Culliton’s commissions. In both cases the MFDA says there is no evidence either respondent benefitted from engaging in the misconduct beyond the commissions or fees they would ordinarily be entitled to if the transactions had been carried out in the proper manner. There is also no evidence of client loss or lack of authorization for the underlying transactions.

In the third case, the MFDA has fined Sean William Kent Parlee $22,500 and assessed costs of $2,500 after the former Royal Mutual Funds Inc. representative admitted he obtained, possessed and in some cases used 110 pre-signed account forms for 35 different clients. Royal Mutual Funds terminated Parlee in November 2018. The representative is not currently registered in the securities industry in any capacity.