The Mutual Fund Dealers Association of Canada (MFDA) has permanently barred a financial advisor from conducting securities-related business after it was determined he borrowed $600,000 from a client, giving rise to an actual or potential conflict of interest.
The MFDA hearing panel ordered that Derek Chapman Heard, who was a mutual fund salesperson for Quadrus Investment Services Ltd. in Alberta, as well as a life insurance agent, engaged in a personal financial dealing with the client by borrowing the money. The MFDA also said Heard failed to co-operate with the regulator regarding the allegations.
Admitted he had borrowed money from client
At first, Heard admitted that he knew that borrowing from a client was wrong but eventually admitted he had indeed borrowed the funds.
The MFDA said Heard tried to limit the MFDA’s investigation of his conduct, wouldn’t answer questions the MFDA asked him, and would change his story from time to time. He also asked for a number of unnecessary delays in the hearings and failed to take part in the misconduct hearing.
The hearing panel ordered that Heard be permanently prohibited from conducting securities related business in any capacity while in the employ of, or in association with, any MFDA member. He was also ordered to pay a fine of $300,000 and costs of $15,000.