The Mutual Fund Dealers Association (MFDA) alleges that Gerry Andrew Mok misappropriated at least $835,541 from at least 6 clients, and at least $245,395 from at least 3 other individuals.
Mok worked in Mississauga, Ontario as an advisor with HollisWealth Advisory Services and its predecessor Dundee Private Investors. Between 2003 and 2012, the MFDA claims that Mok told clients that his firm was in business of providing loans and mortgages to those who could not obtain funds from other financial institutions. If clients provided money for this loan program, Mok is alleged to have offered them a rate of return of 10% to 36% per year, describing it as a secure, risk-free investment.
In a notice of hearing published on Sept. 24 the MFDA claims that after issuing promissory notes for the bogus loan program, Mok deposited his clients’ money into his bank account and used the funds for his own benefit.
The MFDA began its investigation into the matter in March of 2013, but Mok left the mutual fund business in November of 2012. His legal counsel replied to MFDA investigators saying that they were surprised to receive their request for information. "While [Mok] is supplying us with information which may be responsive, could you please explain the basis upon which you say he must respond to you?," asked his lawyers. "Furthermore, while he has instructed us that he wishes to cooperate with you, would you please explain the consequences if he does not, particularly as he is no longer a member of your corporation?" Mok never did provide a written statement or documents to the MFDA, nor has he come to the MFDA offices to be interviewed.
While the MFDA may impose a fine if it determines that Mok misappropriated client funds, it remains to be seen if it will actually be able to collect. As The Insurance and Investment Journal reported earlier this year, the regulator only has the power to collect fines from formerly-registered advisors who are in Alberta. In other provinces the MFDA lacks the ability to enforce these decisions, and last year it only collected about 2% of the penalties it handed out.
None of the MFDA allegations concerning Mok have been proven. The hearing is scheduled to take place in Toronto between Jan. 11 and Jan. 15, 2016.