TORONTO, May 14, 2015 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of George William Popovich (the "Respondent") by Notice of Hearing dated November 30, 2012, as amended on July 15, 2013.
In its Decision and Reasons (Misconduct), dated January 14, 2015, the Hearing Panel found that the three (3) allegations made against the Respondent in the Amended Notice of Hearing dated July 15, 2013, had been established, and the particulars of which are:
Allegation #1: Between August 2004 and February 2009, the Respondent failed to use due diligence to learn the essential facts relative to clients SM, MH, WC and PC, GL, and SL and accurately record the essential facts on the clients' New Account Application Forms, contrary to MFDA Rules 2.2.1(a) and 2.1.1.
Allegation #2: Between August 2004 and February 2009, the Respondent:
a) recommended and facilitated the implementation of a leveraged investment strategy in the accounts of clients SM, MH, and WC and PC; and
b) recommended and sold a "return of capital" mutual fund to clients GL and SL;
without ensuring that the leveraged investment strategy and return of capital mutual fund was suitable for the clients, in keeping with the clients' investment objectives and within the bounds of good business practice, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #3: Between August 2004 and February 2009, the Respondent misrepresented or failed to adequately explain the risks, benefits, material assumptions and features of:
a) the leveraged investment strategy that he recommended and implemented in the accounts of clients SM, MH, and WC and PC; and
b) the return of capital mutual fund that he recommended and sold to clients SM, MH, WC and PC, GL, and SL;
thereby failing to present the leveraged investment strategy and return of capital mutual fund to the clients in a fair and balanced manner, contrary to MFDA Rules 2.2.1 and 2.1.1.
Submissions by the parties with respect to penalty took place yesterday before a three-member Hearing Panel of the MFDA's Central Regional Council. After hearing submissions from the parties, the Hearing Panel imposed the following sanctions on the Respondent, and advised that it will issue its written reasons in due course:
- a permanent prohibition on the authority of the Respondent to conduct securities related business in any capacity while in the employ of or associated with any MFDA Member;
- a fine in the amount of $100,000; and
- costs in the amount of $50,000.
A copy of the Amended Notice of Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Amended Notice of Hearing, the Respondent carried on business in Windsor, Ontario.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 104 Members and their approximately 80,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA's complaint and enforcement processes, as well as links to 'Check an Advisor' and other Investor Tools, visit the For Investors page on the MFDA website.
SOURCE Mutual Fund Dealers Association of Canada