Former Quadrus Investment Services employee fined $300k, failed to cooperate with MFDA investigation
A former rep has been banned for life and fined $300,000 after he borrowed $600,000 from a client and failed to cooperate with an MFDA investigation.
Derek Chapman, who used to work for Quadrus Investment Services Inc. in St. Catherines, Ont., repaid the money, although the circumstances of that repayment remain mysterious. Chapman was also ordered to pay costs of $15,000.
The hearing panel noted in their decision statement that he had repaid the loan by mortgaging his family home, which had recently been put in his wife’s name. Chapman refused to tell the MFDA whether the lender that allowed him to repay his client was an insurance client of his. He would only say they were not an MFDA client.
The MFDA discovered the source of the funds by searching the title of the respondent’s home and through an anonymous tip from a whistleblower, but were unable to determine the relationship between the mortgagee and Chapman.
“Although the second lender may well have been one of the respondent’s insurance clients, we have no clear proof of his status and will leave that issue to other regulatory agencies,” the MFDA said.
