TORONTO, June 7, 2012 /CNW/ - The MFDA today announced that it has issued a Notice of Settlement Hearing regarding the presentation, review and consideration of a proposed settlement agreement by a Hearing Panel of the MFDA's Central Regional Council.
The settlement agreement will be between Staff of the MFDA and Douglas A. Lawson (the "Respondent") and involves matters for which the Respondent may be disciplined by a Hearing Panel pursuant to MFDA By-laws.
The proposed agreement concerns allegations that, between August 1, 2002 and November 1, 2005, the Respondent, among other things:
(a) approved, recommended and allowed the sales of shares of a company related to the Member (the "Company") to clients without conducting or ensuring that adequate due diligence had been conducted on the product;
(b) sold shares of the Company to 48 clients without ensuring that these investments were suitable for the clients and in keeping with their investment objectives;
(c) sold shares of the Company to 9 clients of the Member in reliance on the accredited investor exemption without obtaining sufficient documentation to enable him to qualify them as accredited investors;
(d) sold shares of the Company to clients in reliance on the closely held issuer exemption without providing any of the clients with a copy of Form 45-501F3 at least four days prior to their purchase of the shares; and
(e) facilitated the sale of shares of the Company to 48 clients without providing the clients with written disclosure of the relationship between the Member and the Company at the time of the sale or of the Member's financial interest in the sale of the shares of the Company;
contrary to MFDA Rules 2.2.1, 2.1.4 and 2.1.1, among other requirements.
The settlement hearing is scheduled to take place on June 19, 2012 commencing at 10:00 a.m. (Eastern) in the Hearing Room located at the MFDA Offices, 121 King Street West, Suite 1000, Toronto, Ontario. The hearing 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 122 Members and their approximately 75,000 Approved Persons with a mandate to protect investors and the public interest.