The Mutual Fund Dealers Association (MFDA) has approved a settlement agreement with Equity Associates Inc. (Equity) that includes sanctions of $125,000 plus costs of $20,000, announced the regulator June 21.
The MFDA says that during the period March 1, 2012 to Sept. 30, 2014, Equity admitted to failing to adequately supervise, or maintain adequate record of supervision at its head office, sub-branch level and branch level of: daily trading activity; approval of new accounts; approval of amendments to know-your-client information; and leveraged accounts.
Failed to maintain adequate compliance resources
Equity also failed to establish, implement and maintain adequate policies and procedures to conduct trend analysis reports to supervise its Approved Persons trading activity, and failed to maintain adequate compliance resources, says the MFDA.
It also failed to adequately supervise, or failed to maintain adequate records of supervision of: uniformity of certain client KYC information; and concentration of sector mutual funds in client accounts.
The MFDA says Equity also “failed to conduct a reasonable supervisory investigation in response to information it received that its Approved Person, Gilles Latour, was charged with offences pursuant to the Criminal Code of Canada for alleged conduct involving clients and other individuals.”
Finally, the regulator says Equity “failed to conduct a reasonable supervisory investigation regarding investment suitability concerns and portfolio concentration issues in the client accounts serviced by its Approved Person Lawrence Fike.
To learn more, consult the settlement agreement on the MFDA’s website.