The Mutual Fund Dealers Association of Canada (MFDA) has permanently banned King Kwong Clement Chow, fining Chow $50,000 plus costs in the amount of $7,500.

In its reasons for decision, the MFDA’s stated Chow failed to cooperate with an investigation by MFDA staff into his conduct regarding leverage risk acknowledgement letters he required certain clients to sign.

“Although the respondent was aware that staff wanted to speak with him, he chose not to respond to them until he was served with the notice of hearing, at which time he sent a letter to enforcement council citing a number of reasons for why he had not previously responded,” the MFDA writes, adding that his response may be an explanation for his conduct, but does not excuse it.

“As an approved person, the respondent had an obligation to respond to staff’s request for information which were sent to him as part of its investigation. This was true even though he was no longer registered as an approved person at the time staff carried out its investigation.” 

Chow did not attend his first appearance or a hearing on the merits. During the investigation he moved addresses without informing the MFDA, causing the panel to adjourn the proceedings until he could be located.

Registered between June and December 2017 and between March and June 2018 with WFG Securities Inc., Chow resigned from the firm in June 2018 and was not registered in any capacity at the time of the proceedings.

During the course of the proceedings, Chow said he did not respond, as he had already been the subject of earlier attention from the MFDA and had been issued a warning letter. He believed that the subsequent proceedings were the result of an internal error at the MFDA.

“While the respondent may have been confused, as he testified about the investigation which is part of these proceedings, the important point is that he did nothing about his confusion. The respondent did not contact anyone at the MFDA about his concerns and simply continued to ignore the MFDA’s correspondence,” they write, adding that enforcement council also submitted that he did not cooperate with staff in its previous investigation either.

“With respect to the respondent’s evidence that he did not respond because he did not want to do the MFDA’s job, enforcement council submitted that that is not how the MFDA works. Every self-regulatory body is dependent on its registrants, both members and approved persons, to provide truthful information when requested,” they add.

“Finally, staff submitted that the panel should put no weight on the respondent’s explanation that he only wanted to communicate with someone in charge because, regardless of the respondent’s views of who might be in charge, approved persons are obligated to respond to requests for information made of them by investigators and case assessment officers. Further, enforcement council pointed out that the respondent never said to any of the staff that he only wanted to speak to someone in charge, he simply never responded and, therefore, he failed to cooperate with the MFDA’s investigation.”