Adviser fined for flawed paperwork
Alocal financial adviser has been fined $6,000 by the Mutual Fund Dealers Association of Canada for breaching regulations related to the handling of clients’ paperwork.
Neil Robert MacDonald, who represents Sun Life in Penticton, was also ordered to pay costs of $2,500, according to an MFDA disciplinary decision handed down Aug. 24 and posted online last week.
“There is no evidence that the respondent received any financial benefit from engaging in the misconduct… beyond any fees that he would ordinarily be entitled to receive had the transactions been carried out in the proper manner,” the decision notes.
“There is no evidence of any client loss or that the transactions were unauthorized.”
According to an agreed statement of facts, Macdonald used six pre-signed forms to process transactions for three different clients between December 2012 and June 2015, in violation of Sun Life and MFDA policies.
MacDonald also admitted that between December 2012 and November 2014 he falsified eight account forms belonging to five different clients by altering trading instructions without having the clients initial the documents to confirm the changes.
The decision explains two of the pre-signed forms were discovered by Sun Life during an on-site branch review in June 2016, prompting an investigation.
That investigation later saw Sun Life send letters to all of MacDonald’s clients to determine if there were any unauthorized transactions on their accounts; none reported any concerns.
The use of pre-signed forms is banned by the MFDA regardless of whether clients authorize their use or not.
“The danger associated with the use of such forms is that they may be used to engage in discretionary trading, they create opportunity for acts of fraud, theft or other forms of harmful conduct towards a client, and they impede or subvert the ability of a member to properly supervise trading activity,” the decision explains. The disciplinary hearing was also told that altering a form without having a client initial the changes is an “equally egregious” breach of policy.