The Mutual Fund Dealers Association of Canada (MFDA) has fined and permanently banned a former Peak Investment Services representative, for failing to cooperate with an MFDA investigation.
The MFDA published its reasons for banning Frank Louis Surette this week. In its decision, the MFDA says a permanent ban, along with a substantial fine, “serve the objective of demonstrating that a failure to cooperate with a regulator will be treated as one of the most egregious breaches of MFDA rules and regulations as possible,” they write. “The respondent was an experienced member of the industry who knew full well what his obligations were. He chose to intentionally ignore them, at the same time he was staying in close contact with staff as their investigation progressed. His conduct was deliberate, willful and wrong.”
Surette first became registered as a mutual fund sales person in 1994. He has not been registered in the securities industry in any capacity since March 2017 when Peak terminated his registration.
Over the course of its investigation into Surette’s actions, the former advisor failed to reply to hearing notices, did not attend when called to appear before the MFDA and would not provide witness statements to investigators. “The respondent was in frequent contact with many of the staff involved in the investigation but offered virtually no cooperation or assistance with it, despite his obligation to do so.” Surette is accused of borrowing or misappropriating $65,718.11 from his father’s investment account.
According to the MFDA’s decision, an approved person remains subject to the regulator’s jurisdiction even if that individual has ceased to be an approved person. “The MFDA is entitled to commence disciplinary proceedings against an approved person up to five years from the date upon which the person ceased to be an approved person,” they write. Failing to cooperate with an investigation, they add, undermines the MFDA’s ability to fulfill its regulatory mandate of protecting the public. “The obligation of participants in a self-regulatory industry such as the securities business to cooperate with an investigation is fundamental to its functioning. Any derogation from that obligation is fundamental in the sense that it imperils the whole regime. That alone justifies taking a severe view of the appropriate penalty.”
In addition to his permanent ban from conducting securities related business in any capacity with any MFDA member firm, Surette is also ordered to pay a fine of $50,000 plus the MFDA’s costs of $11,187.50.
