The Mutual Fund Dealers Association (MFDA) has ordered Gurpreet Singh Bansal to pay a $12,500 fine and costs in the amount of $2,500 after compliance officers discovered his hoard of pre-signed forms.
Bansal was licensed with Desjardins Financial Security and did business through the company's branch office in Kelowna, British Columbia. Desjardins discovered a pile of pre-signed forms during a routine audit of his client files, including:
●12 account opening forms;
●2 Registered Savings Plan application forms;
●13 change of dealer forms;
●14 account transfer forms;
●25 letters of direction;
●3 Education Savings Plan application forms;
●7 Tax Free Savings Account forms;
●8 Investor Questionnaires;
●2 account modification forms; and
●1 trade ticket.
As part of its subsequent investigation into the matter, Desjardins sent letters to all of Bansal's clients to determine whether he had engaged in any unauthorized trading. None of the clients reported any such concerns, nor was there evidence that any of them had suffered financial harm.
When brought before the MFDA, Basal claimed that he had not received adequate training or been told by anyone that obtaining and using pre-signed forms was contrary to the MFDA’s rules.
The MFDA hearing panel rejected this argument and imposed a fine of $12,500, more than double the $5,000 minimum that is recommended in the regulator's guidelines, on the grounds that the penalty would "address the issue of specific and general deterrence, to maintain confidence in the integrity of the MFDA and its regulatory process, and is in the public interest".
How much confidence one may have in the regulatory process in this case remains to be seen. Basal is no longer registered, so he is now outside of the MFDA's grasp; Alberta is the sole province in which the regulator may pursue former advisors through the courts. Last year, the MFDA only collected 16% of the fines it handed out.