The Mutual Fund Dealers Association of Canada (MFDA) has fined a former Ontario-based mutual fund salesman, Christiaan Hesselink, $400,000 for recommending exempt market products to clients without the approval or knowledge of his dealer firm.
Between October 2007 and April 2011, Hesselink invested roughly $8.4 million from 58 clients and 18 other individuals in two exempt market investment products, according to the MFDA. During this time, Hesselink was registered with FundEX Investments Inc. Hesselink retired from the industry in 2013.
The MFDA’s Decisions and Reasons document states that in November 2006, Hesselink sought approval to recommend Skyline Apartment Real Estate Investment Trust to clients. FundEX decided against approving the product in September 2007.
Despite not having approval, Hesselink referred clients to Skyline and received $346,286 in fees, which were place in his own company. According to the MFDA, the Ontario Securities Commission (OSC) reached a settlement with Skyline in 2011. As part of the agreement, Skyline admitted to breaching Ontario securities law and repaid all clients who did not qualify as accredited investors. It was around that time that Hesselink informed FundEX that he had clients invested in Skyline.
In March 2010, Hesselink referred another non-approved exempt market product, according to the MFDA. At that time, six of the retired fund salesman’s clients invested $850,000 in HarbourEdge Capital Corp., earning Hesselink approximately $9,000 in fees. Hesselink told FundEX of the investments in HarbourEdge at the same time he informed the company of the Skyline product.
In addition to the fine, Hesselink is also banned from conducting securities related business for five years and must pay $7,500 in costs.