A former mutual fund advisor has been permanently prohibited from securities-related business and told to pay $50,000 in fines and costs after he failed to co-operate with an investigation by the Mutual Fund Dealers Association (MFDA).
The case goes back to June 2016 when the MFDA says David Jeremy Dean was made aware of allegations by two clients that he had obtained one pre-signed and one falsified client account form in 2015. When the clients involved requested redemptions from their accounts, Dean said he would inform the fund company of the requests.
But when he received a notice of an MFDA inquiry into the issue, he did not attend in person as required. According to the MFDA, Dean had not been registered in the securities industry since November 2014.
Investigation called an “overreach”
During a later hearing, Dean said he thought he had responded to MFDA questions. He also said that the original allegations made in an inquiry letter “were unnecessary and that the investigation was a big overreach. He believed he had conducted himself in a reasonable manner in the circumstances.”
He told the hearing panel that he found MFDA staff difficult to deal with, that they treated him badly and failed to send him information when they said they would. He did acknowledge, however, that he could have done a better job of following up with MFDA staff.
Panel did not find evidence credible
The hearing panel acknowledged that Dean, who represented himself during the hearing, faced some challenges in presenting his evidence. But in the end the panel said it did not find some aspects of his evidence credible and that he provided little evidence to support his case. “A reasonably diligent former Approved Person would have followed up with the investigator in those circumstances,” said the panel.
In its decision, the hearing panel said that if the initial allegations against Dean could have been proven against him, it likely would not have resulted in a significant sanction against Dean. “We have considered this factor in our determination of sanction, but have balanced it against the importance of the need to cooperate in investigations.”
Dean was then permanently prohibited from securities-related business while employed by or associated with any MFDA member, fined $40,000 and levied costs of $10,000.
