Former fund rep fined $50,000 for failing to co-operate with MFDA investigation into the accusations
An ex-advisor has been handed a lifetime ban and a $50,000 fine by the MFDA for failing to cooperate with an investigation into whether he had emptied his father’s bank accounts into his own accounts.
Frank Louis Surette was a mutual fund dealing rep with Peak Investment Services Inc. in Ontario from November, 1994, to March, 2017. He was found in violation of MFDA by-laws after largely ignoring MFDA staff requests to provide bank account information and sit for an interview.
MFDA staff contacted him by phone, email, and hand-delivered letter between July 17, 2017 and April 18, 2018. His only replies provided the MFDA with incomplete information. MFDA staff were investigating allegations that Surette liquidated two of his father’s bank accounts and transferred their contents to his own accounts.
Surette took his father on as a client in January 2014. He was given control of his father’s Registered Retirement Income Fund and a non-registered account. Between December 2015 and October 2016, he is accused of processing 14 redemptions totalling $67,272.57 from his father’s accounts and deposited the proceeds into bank accounts controlled by Surette and/or his former spouse.
When Peak conducted a branch review and found records of these redemptions, Surette insisted that he’d borrowed the money from his father but hadn’t made any written agreement with his dad. The MFDA heard that Peak noticed that Surette had used some of that money to pay personal expenses, including legal fees. Peak reported their concerns to the MFDA, which commenced its investigation in January 2017.
In one of his few replies to the MFDA investigation, Surette then claimed the money wasn’t borrowed from his dad, but rather it was distributed as gifts to his father’s children and grandchildren.
The MFDA stated: “As a result of the respondent’s failure to cooperate with staff’s investigation, staff has been unable to determine whether the transactions … contravened the respondent’s regulatory obligations and if so, the full nature and extent of those contraventions.”
Surette must also pay costs of more than $11,000.
