Representative fined $30,000 for photocopying signature pages

A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has accepted a settlement agreement between MFDA staff and Sarnia, Ontario-area dealing representative, Pieter Hendrik Leendert Lindhout. In the agreement Lindhout admits to photocopying and reusing signature pages, keeping pre-signed forms, and processing altered forms without obtaining client initials to authorize the alterations.

Registered since August 1997 as a dealing representative with Quadrus Investment Services Inc., Lindhout’s files were first audited in January 2020 when Quadrus conducted a branch review. A full audit of Lindhout’s business uncovered the remaining forms. All told, the representative admits to photocopying signature pages and using those photocopies to complete 23 additional forms for 14 different clients. He used 17 account forms that had be altered without obtaining client authorization and obtained six pre-signed forms from two different clients, all between 2015 and 2018.

“At all material times, the member’s policies and procedures prohibited approved persons from photocopying a document to re-use a client’s signature,” the MFDA’s settlement agreement states. The forms included educational assistance payment forms, redemption forms, transfer authorization and know your client (KYC) forms, letters of direction and others.

Quadrus issued a disciplinary letter to Lindhout in February 2020 and placed him under close supervision for a minimum of one year, imposing a $400 monthly fee on the representative for his close supervision. The close supervision ended March 31, 2021. Lindhout paid a total of $5,200 to Quadrus for his supervision. The MFDA says Quadrus has not identified any further concerns about the representative’s business practices. There is also no evidence of client loss, complaint or lack of authorization.

In addition to the $30,000 fine, Lindhout must also pay the MFDA’s costs in the amount of $5,000 and must successfully complete the Ethics and Professional Conduct Course offered by the IFSE Institute before May 25, 2023.