TORONTO, July 23, 2013 /CNW/ - The MFDA today announced that it has commenced disciplinary proceedings in respect of David H. Karas (the "Respondent"). MFDA staff alleges in its Notice of Hearing that the Respondent engaged in the following conduct contrary to the By-laws, Rules or Policies of the MFDA:
Allegation #1: Between 2002 and 2008, the Respondent misrepresented, failed to fully and adequately explain, or omitted to explain the risks, benefits, features and costs of leveraged investment recommendations that he made to at least 18 clients, thereby failing to ensure that the leveraged investment recommendations were suitable for the clients and in keeping with their investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #2: Between 2002 and 2008, the Respondent failed to ensure that his leveraged investment recommendations were suitable for at least 18 clients and in keeping with their investment objectives, having regard to the clients' "Know-Your-Client" information and financial circumstances, including but not limited to the clients' ability to afford the costs associated with the investment loans and withstand investment losses, contrary to MFDA Rules 2.2.1 and 2.1.1.
The first appearance in this matter will take place by teleconference before a Hearing Panel of the MFDA's Central Regional Council on September 18, 2013 at 10:00 a.m. (Eastern) in the MFDA hearing room located at 121 King Street West, Suite 1000, Toronto, Ontario. The purpose of the appearance is to set a date for the hearing of this matter on its merits and to address any other procedural matters and will be open to the public, except as may be required for the protection of confidential matters.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 115 Members and their approximately 80,000 Approved Persons with a mandate to protect investors and the public interest.
SOURCE Mutual Fund Dealers Association of Canada