MFDA imposed $8.5M in fines last year

In concluding 133 hearings last year, the MFDA imposed fines of almost $8.5 million against members and approved persons, says the MFDA 2017 Annual Enforcement Report.

The report highlights the SRO’s enforcement activities in combating unsuitable investment recommendations, falsification, unauthorized outside business activities and other securities regulatory breaches.

The report also describes significant disciplinary decisions from 2017. Notable is completion of the first proceeding against a dealer by any Canadian securities regulator addressing sales incentives, marketing and educational practices under NI 81-105. The case dealt with failures by Sun Life Financial to adequately supervise internal sales incentives, marketing and educational practices.

Other report highlights include:

121 proceedings commenced—the highest number for any year to date;
133 hearings concluded—also the highest number for any year to date;
22 permanent prohibitions and 48 suspensions against members and approved persons, and a subsequent $536,500 in costs; and
$1,865,673 collected in fines—about 22% of total fines imposed in 2017.

Read: MFDA bans and fines rep for ‘misappropriating’ TFSA funds

Most common allegations in proceedings

The majority of the proceedings commenced last year (56) involved pre-signed forms. As of 2017, the MFDA divided the pre-signed forms category into pre-signed forms and active signature falsification (28 proceedings). In 2016 this category was known as signature falsification, and included pre-signed forms and falsification/misrepresentation cases that involve signature falsification. And in that year, 60 of the proceedings involved the signature falsification allegation.

Falsification/misrepresentation was the second most common allegation in proceedings commenced in 2017 (43) followed by policy and procedures (35 procedures).

Read the full report here.

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