An unusual case where an advisor allegedly altered important client documents begs the question “why?”
A dealing representative in the Vancouver area is alleged to have used 27 partially completed and signed Letters of Direction (“LOD”) for eight clients between March 2009 and May 2013 contrary to MFDA Rule 2.1.1. In addition, the advisor, who was also a PFSL branch manager, is accused of altering photocopies of blank pre-signed LOD, also contrary to MFDA rules.
The notice of hearing makes no allegations of fraud. The alleged rule infractions were uncovered by PFSL’s Field Audit Department in a routine audit at the respondent’s branch in 2013. The PFSL rep has been registered to sell mutual funds since 1993.
WP reached out to Shaun Devlin, Senior Vice-President, Member Regulation, for the MFDA to find out just how unique this type of allegation really is.
In recent weeks WP’s covered several examples of advisors using pre-signed forms of one kind or another to save themselves and their clients’ time. While it’s understandable why this might happen, it still contravenes MFDA rules.
“The MFDA currently places a priority on the issuance of disciplinary proceedings aimed at eliminating the practice,” said Devlin. “We do not track the incidence by type of form, although trading forms are the most common.”
Advisors, whether MFDA- or IIROC-regulated, have an obligation to their clients (and dealers) to cross the t’s and dot the i’s no matter how tempting it is to skirt the rules. It’s part of the job description, albeit a mundane and time-consuming requirement.
The SRO will hold an initial teleconference May 7 to set a hearing date whereupon the merits of the MFDA staff’s allegations will be heard.
The notice of hearing makes no allegations of fraud. The alleged rule infractions were uncovered by PFSL’s Field Audit Department in a routine audit at the respondent’s branch in 2013. The PFSL rep has been registered to sell mutual funds since 1993.
WP reached out to Shaun Devlin, Senior Vice-President, Member Regulation, for the MFDA to find out just how unique this type of allegation really is.
In recent weeks WP’s covered several examples of advisors using pre-signed forms of one kind or another to save themselves and their clients’ time. While it’s understandable why this might happen, it still contravenes MFDA rules.
“The MFDA currently places a priority on the issuance of disciplinary proceedings aimed at eliminating the practice,” said Devlin. “We do not track the incidence by type of form, although trading forms are the most common.”
Advisors, whether MFDA- or IIROC-regulated, have an obligation to their clients (and dealers) to cross the t’s and dot the i’s no matter how tempting it is to skirt the rules. It’s part of the job description, albeit a mundane and time-consuming requirement.
The SRO will hold an initial teleconference May 7 to set a hearing date whereupon the merits of the MFDA staff’s allegations will be heard.
