The Mutual Fund Dealers Association of Canada (MFDA) in two separate settlement agreements, has fined John Paul Hillsdon and Charles Lewis Rolland for keeping pre-signed forms and for altering forms and using those forms for processing, without having clients initial the alterations.
In the first case, Hillsdon was fined $15,000 plus costs in the amount of $2,500 after he obtained, possessed and in some instances used to process transactions, 14 pre-signed forms for seven different clients over the course of a five-year period, beginning in 2014. He also admits to altering 11 account forms for nine different clients between 2014 and 2017. Registered in the industry since 2003 and registered since 2012 with Investia Financial Services Inc., the Markham, Ontario area representative also worked as a branch manager between 2005 and the end of 2016.
The forms in question were discovered during the course of a branch review. In addition to his fine, Hillsdon is barred from acting as a branch manager or in any supervisory capacity for six months. He must also successfully complete education from the Canadian Securities Institute or the Investment Funds Institute of Canada (IFIC) before acting as a branch manager again in the future.
In Rolland’s settlement agreement, the FundEX Investment Inc. representative from Oshawa, Ontario, registered in the securities industry since 1997, agreed to pay $12,000 in fines and $2,500 in costs. In the agreement, Rolland admitted he altered and used 39 account forms for 25 different clients without obtaining client initials to authorize the changes. He also kept eight pre-signed forms for five different clients. Rolland’s forms were generally used between 2014 and May 2019.
Both firms contacted all affected clients with a history of transactions and to confirm the accuracy of their know your client (KYC) account information. No clients reported any concerns about the handling of their accounts. The MFDA says there is no evidence the representatives received any financial benefit beyond the commissions and fees they would ordinarily be entitled to receive.
The firms both placed their representatives under supervision for 90 days and issued warning letters. At Investia, Hillsdon was charged $863 for the cost of issuing audit letters. Rolland, meanwhile, was charged $15,000 by FundEX for the cost of carrying out the strict supervision and for the cost of issuing the client letters.