Mutual fund seller fined and banned
23 clients defrauded of $1.6 million Addict, gambler stung elderly, vulnerable
VANCOUVER— The B. C. Securities Commission has issued its maximum penalty — a $ 250,000 fine and a lifetime ban — against a former mutual fund salesman at Investors Group who defrauded clients of about $ 1.6 million.
Paul Robert Maudsley of White Rock, B. C., has been prohibited from trading securities, being a director or officer and engaging in investor relations. He must also pay a $ 250,000 administrative penalty, plus almost $ 60,000 in costs related to a hearing.
Investors Group has paid out more than $ 2.3 million to victims. A commission panel found that Maudsley and his own company, Shaylor Management Ltd., committed fraud when he persuaded 23 clients to redeem about $ 1.6 million in fund holdings to invest in other securities. Maudsley did not invest any of the money. Instead, he took it for his own use, including what one witness described as “ his cocaine and gambling habit and alcohol addiction.” The commission panel also ceasetraded Shaylor’s securities. The firm is permanently banned from trading securities and must also pay an administrative penalty of $ 500,000 — the maximum allowed — and hearing costs. The panel also found that Maudsley failed to deal fairly, honestly and in good faith with his clients, nearly half of whom were elderly or vulnerable. “He simply took their money, or caused Shaylor to do so — about as stark an instance of deceit as there can be,” the panel said.
“ Maudsley had subjective knowledge of the deceit and that it would result in the deprivation of others.” Maudsley was a mutual fund salesman at Investors Group Inc.’ s South Surrey regional office in White Rock between 1996 and 2003. He was fired on March 3, 2003.
In January 2003, when a compliance officer at another mutual fund dealer alerted commission staff about an “ offbook” transaction involving Maudsley, the commission contacted Investors Group, which investigated.