Ontario advisor banned permanently for failing to co-operate with an investigation

By The IJ Staff | January 08 2020 01:30PM

A mutual fund advisor has been banned permanently from conducting securities-related business and ordered to pay fines and costs totalling $55,000 after the advisor failed to co-operate with MFDA staff during an investigation into his conduct – an allegation the advisor later admitted.

In handing down its decision on Jan. 6 on Oakville, ON advisor Jay Kim, the Hearing Panel of the Central Regional Council of the MFDA said that “a failure to co-operate is a failure to comply. It prevents the MFDA from performing its regulatory function. It prevents the regulatory body from fully investigating a matter and determining all of the relevant facts, as well as the full extent, and implications of the underlying events.”

The failure to co-operate began Nov. 14, 2016 and continued through Nov. 12, 2018.

Advisor alleged to have submitted false documentation

Documents filed with the hearing allege that MFDA staff became aware during the investigation that Kim had submitted a $200,000 loan application on behalf of a client that contained fabricated supporting documents.

At first, Kim did not co-operate with the investigation but when he came forward later he admitted to the allegation. 

MFDA exercises discretion

The MFDA said it exercised its discretion to impose a penalty based on the importance of the protection of the investing public, the integrity of the securities market and the protection of the MFDA membership, among other issues.

A major factor in this case was Kim’s initial failure to co-operate with the MFDA investigation. “[This] is very serious misconduct which demonstrates a fundamental breach of a registrant’s obligations and illustrates that the registrant is ungovernable,” states information presented to the panel.

The panel placed a permanent prohibition on Kim’s authority to conduct securities-related business while working for, or associated with, any MFDA member, as well as a fine totalling $50,000 and costs of $5,000.

Related to the same topic …