Three reps sanctioned for using pre-signed account forms and other violations

The Mutual Fund Dealers Association of Canada (MFDA) has settled with representatives in three different cases, after the reps obtained, possessed and in some cases used pre-signed account forms to process transactions. In one case the representative was also barred for six months for altering client account forms without having the client initial the alterations.

In the first case, Ottawa-area representative, Lloyd Smith is prohibited from conducting securities related business in any capacity with an MFDA-member firm for a period of six months. Smith must also pay a fine in the amount of $20,000 and costs in the amount of $2,500 after admitting that he altered 30 account forms for 28 different clients, without having clients initial the alterations. The identified alterations included changes to client investment instructions, mutual fund codes, fund names, investment objectives and clients’ net worth and occupations. Smith also admits that he obtained, possessed and in some cases used to process transactions 215 pre-signed account forms for 25 different clients. The former FundEX investments representative had been registered in the mutual fund industry since May 1998. He is no longer registered in the securities industry in any capacity after resigning in June 2018.

In the second case, David Dekker, a St. Catharines, Ontario representative with Y.I.S. Financial agreed to pay a $12,500 fine and costs of $2,500 after admitting he also obtained, possessed and in some cases used 22 pre-signed account forms to process transactions for 17 different clients. He also admitted to altering 13 account forms for ten different clients without having the client initial alterations, and admitted that he submitted seven letters of direction directly to mutual fund companies, to process transactions in the accounts of two clients, without his firm’s knowledge or approval.

In the third case, Maurice Mailloux, a Windsor, Ontario representative with Quadrus Investment Services Ltd., admitted that he obtained, possessed and in some instances used 99 pre-signed account forms for 25 different clients. Mailloux will pay a fine of $20,000 and costs in the amount of $2,500.