Son of W. H. Stuart owners deemed "ungovernable"par Andrew Rickard | January 12 2016 02:01PM
The Mutual Fund Dealers Association (MFDA) has imposed new sanctions in part of the ongoing saga involving the W.H. Stuart mutual fund dealership. Last week, regulators permanently prohibited James Howard Munro Stuart from conducting securities related business.
The bankrupt mutual fund firm has already cost the MFDA Investor Protection Corporation (IPC) more than $6 million, paid out in claims to investors affected by the dealer's insolvency. On top of allegations that husband and wife team Walter Howard Stuart and Marilyn Dianne Stuart misappropriated or otherwise failed to account for more than $800,000 of investments and monies from over thirty clients, the regulators have now banned their son James Stuart from conducting securities related business in any capacity.
Besides being registered as an advisor with the W.H. Stuart dealership, James Stuart was principal of Stuart Financial Corporation and Stuart Securities Corporation, two firms based in the state of Georgia and affiliated with W.H. Stuart's Canadian operations. Despite having been contacted by MFDA staff on several different occasions, James Stuart failed to appear for an interview and also failed to attend two hearings in September and November last year.
In their reasons for decision, MFDA hearing panel chairman Frederick Chenoweth and industry representatives Cheryl Hamilton and Casimir Litwin found that Stuart's "failure to cooperate with Staff’s investigation demonstrated that he was ungovernable and would therefore pose a risk to investors and the capital markets were he to continue to operate in the capital markets."
Besides banning him from the industry, the MFDA has also ordered James Stuart to pay a $75,000 fine as well as costs in the amount of $7,500.