The latest example of a dealing representative getting a fine leaves many advisors wondering when the SROs bite will match its bark
A one-time branch manager has now reaches a settlement with MFDA that will see him pay a $10,000 fine plus $2,500 in costs but also hand him a six-month suspension from acting in any supervisory or compliance role. The censure comes for cutting corners and running afoul of compliance at his own firm.
“The fine for this degree of use of pre-signed forms by a non-AP would normally attract a fine of approximately $10,000, which was imposed here… These days, we generally try to impose at least a $5,000 fine for this type of misconduct. [In Edmond’s case] there were 74 forms and he was a branch manager, so he received a higher fine, plus the BM suspension.”
In a settlement agreement, announced by the MFDA this week, Paul Jerome Edmond, a Dealing Representative with Quadrus Investment Services Ltd., admits that for a little more than five years between February 2008 and April 2013, he used or intended to use a total of 74 blank pre-signed account forms or photocopies of partially complete pre-signed account forms for 30 client accounts. That’s contrary to MFDA Rule 2.1.1.
WP reached out to Hugh Corbett, the MFDAs managing director of enforcement.
We specifically wanted to know if there was any difference in the discipline meted out by the SRO as a result of Edmond’s positon, albeit briefly, as branch manager.
“We consider it to be an aggravating factor when the respondent is a Branch Manager and either uses, or approves the use of, pre-signed forms to process trades in client accounts, as occurred in this case,” says Corbett. “A Branch Manager is in a heightened position of responsibility and trust.”
So, had Edmond never been a branch manager or registered as a branch manager it’s likely a fine and costs would have been the only disciplinary action taken by the MFDA. Of course, the settlement agreement is a two-way negotiation but the fact the respondent paid the fines indicates a willingness to cooperate in order to remain in the industry.
“The respondent admitted to his misconduct and cooperated with our review of the matter. We felt, on balance, that a suspension of his ability to carry on as a dealing representative was not warranted in this instance.”
As for the $10,000 fine, Corbett indicates that this amount is pretty standard given the number of forms used in this instance.
Every week it seems the MFDA announce fines, costs, and suspensions of Dealing Representatives. Rarely does it seem to come down hard on management.
This latest agreement suggests things could be changing.
“The fine for this degree of use of pre-signed forms by a non-AP would normally attract a fine of approximately $10,000, which was imposed here… These days, we generally try to impose at least a $5,000 fine for this type of misconduct. [In Edmond’s case] there were 74 forms and he was a branch manager, so he received a higher fine, plus the BM suspension.”
In a settlement agreement, announced by the MFDA this week, Paul Jerome Edmond, a Dealing Representative with Quadrus Investment Services Ltd., admits that for a little more than five years between February 2008 and April 2013, he used or intended to use a total of 74 blank pre-signed account forms or photocopies of partially complete pre-signed account forms for 30 client accounts. That’s contrary to MFDA Rule 2.1.1.
WP reached out to Hugh Corbett, the MFDAs managing director of enforcement.
We specifically wanted to know if there was any difference in the discipline meted out by the SRO as a result of Edmond’s positon, albeit briefly, as branch manager.
“We consider it to be an aggravating factor when the respondent is a Branch Manager and either uses, or approves the use of, pre-signed forms to process trades in client accounts, as occurred in this case,” says Corbett. “A Branch Manager is in a heightened position of responsibility and trust.”
So, had Edmond never been a branch manager or registered as a branch manager it’s likely a fine and costs would have been the only disciplinary action taken by the MFDA. Of course, the settlement agreement is a two-way negotiation but the fact the respondent paid the fines indicates a willingness to cooperate in order to remain in the industry.
“The respondent admitted to his misconduct and cooperated with our review of the matter. We felt, on balance, that a suspension of his ability to carry on as a dealing representative was not warranted in this instance.”
As for the $10,000 fine, Corbett indicates that this amount is pretty standard given the number of forms used in this instance.
Every week it seems the MFDA announce fines, costs, and suspensions of Dealing Representatives. Rarely does it seem to come down hard on management.
This latest agreement suggests things could be changing.
