A Mutual Fund Dealers Association of Canada (MFDA) hearing panel handed down a permanent ban, a $75,000 fine and ordered $7,500 in costs against Charles Albert Martin, a former financial advisor with Investia Financial Services Inc. in Kitchener, Ont., after it found he committed several violations stemming from his practice of charging additional service fees outside of his dealer.
The MFDA hearing panel, which has yet to issue its reasons in the case, found that three of the six allegations brought against Martin were proven.
Specifically, the hearing panel found that he “disregarded directives” from his dealer to stop charging service fees to clients, or providing services outside the dealer, such as insurance, tax and estate planning, in exchange for annual fees between 0.5% and 2.5% of the clients’ mutual fund assets. The firm ordered him to stop charging the fees after it received several client complaints.
Yet, the hearing panel said the Martin misled his firm about whether he stopped charging the service fees; and it also found that he misled MFDA staff during its investigation, “when he falsely stated during an interview with staff that he had ceased charging service fees.”
In addition, the MFDA hearing panel found that Martin was in conflict of interest when he solicited a pair of clients to appoint a corporation that he controlled as a trustee of their will.
Photo copyright: serezniy/123RF