Following a disciplinary hearing which proceeded without participation from the accused, the Mutual Fund Dealers Association of Canada (MFDA) has fined former Assante Financial Management Ltd. advisor, David Ken Carleton Richard, $275,000, plus costs totaling $11,612.50, after it found that Richard had stolen money from two clients, and produced fake account statements to cover his misappropriation, before he ceased communicating with his clients and the MFDA.  

The Thunder Bay, Ontario representative was also licensed as an insurance agent during the material time, selling products through a company that he owned and operated, known as VAST Benefits.  

Licensed in the mutual fund industry since 2007, Richard was licensed with Assante between July 2013 and April 2018. During the course of its investigation, the MFDA attempted to contact Richard by process server, registered mail, regular mail, email and by phone. “Despite numerous attempts, staff was unable to contact or locate the respondent,” they write. 

Fabricated account statement 

According to the MFDA’s hearing notice, between 2015 and 2018 Richard misappropriated approximately $98,550 from two clients and furnished one with a fabricated account statement which concealed the misappropriation. 

In the first case, Richard was in a relationship with the daughter of his client, a senior, unsophisticated investor suffering from anxiety. Approximately $62,143.30 was taken from that client, funded in part by redemptions Richard had processed in her account and by checks and bank drafts made payable to Richard and VAST. After receiving the payments, the MFDA says Richard deposited all of the money into his personal bank accounts. When the client’s daughter became aware of the payments, Richard provided a fabricated account statement indicating that his client held accounts at Fidelity Investments. Shortly after, he ceased communicating with his client and her daughter altogether. The client found out the fabricated statement was not genuine when she attempted to transfer the investments to another institution.  

In the second case, Richard solicited and accepted payments totaling approximately $36,350 from another client, again funded by redemptions, bank drafts and money orders. In both cases the clients incurred substantial withholding taxes when they redeemed their investments. In 2018 when the second client informed Richard that he intended to redeem his shares and asked for a statement of his investments, Richard again ceased communicating with his client.  

Permanently banned 

Assante terminated Richard in April 2018 and has reportedly compensated the affected clients. In addition to the fine and costs, the MFDA has also permanently banned Richard from conducting securities related business in any capacity with any MFDA member firm. To date, the MFDA says he has not repaid or otherwise accounted for the missing funds in either case.