A Mutual Fund Dealers Association (MFDA) of Canada hearing panel has fined and permanently banned Frank Surette, a former Peak Investment Services representative, for failing to cooperate with an MFDA investigation.
According to the MFDA’s hearing notice, it is alleged that Surette processed over $67,272 worth of redemptions from his father’s registered retirement income fund, and deposited the proceeds into bank accounts controlled by himself and his former spouse. By the end of the October 2016, Surette had fully liquidated both of his father’s investment accounts.
At a branch review, he then stated that he had borrowed the proceeds from his father without informing his firm that he had entered into an agreement or arrangement to borrow money from a client. Surette later denied that he borrowed the money, instead claiming that the redemption proceeds had been distributed to family members as gifts to his father’s children and grandchildren.
During the course of its investigation, the MFDA says it made repeated requests for bank statements from Surette and his former spouse which were ignored. The former representative also failed to contact MFDA staff to schedule an interview.
“As a result of the respondent’s failure to cooperate with staff’s investigation, staff has been unable to determine whether the transactions processed in the accounts of (his) client contravened the respondent’s regulatory obligations and if so, the full nature and extent of those contraventions,” the MFDA writes.
In addition to the permanent ban from conducting securities-related business in any capacity with any MFDA member firm, Surette has also been fined $50,000 and assessed costs of $11,187.50.
