The Mutual Fund Dealers Association of Canada (MFDA) has banned Gerard Andrew Mok, a former financial advisor in Mississauga, Ont., and imposed a $500,000 fine for soliciting almost $2 million in funds from his clients for his own personal benefit as well as for failure to co-operate with an MFDA investigation into the situation.
A hearing panel of the MFDA’s Central Regional Council convened on Monday in Toronto to make their findings on Mok’s conduct public. In addition to the ban and the $500,000 fine, Mok is being ordered to pay $7,500 in costs.
The panel was presented with an “agreed statement of facts” prior to the hearing on Monday that includes details on Mok’s infractions against his clients and other individuals, which took place between January 2003 and October 2012.
During this time, Mok was an advisor with Toronto-based HollisWealth Advisory Services Inc., a subsidiary of Bank of Nova Scotia, and two predecessor firms: Dundee Private Investors Inc., which Scotiabank acquired in 2011, and Cartier Partners Financial Services Inc., which was merged with Dundee Private Investors in 2004.
Mok admitted to soliciting and accepting more than $1.8 million from at least six clients, $148,000 from two other individuals and US$166,000 from a third individual. That money was deposited into one or more bank accounts under his control.
Mok told the six clients and three other individuals that providing the money to him would generate rates of return of 10% or higher and better than what could be expected through their current investments. He also told them he would secure and guarantee the money given to him.
Mok issued promissory notes to all nine individuals stating that he would personally repay them. Between January 2003 and Oct. 17, 2012, he did repay some of the money to those individuals, but admits he continues to owe at least $455,000.
His conduct failed to “deal fairly, honestly and in good faith with the clients and other individuals” and he engaged “in a business conduct or practice, which was unbecoming or detrimental to the public interest,” the MFDA hearing panel’s findings state.
The agreed statement of facts indicates that HollisWealth and Dundee were not aware of these arrangements between Mok, some clients and some other individuals.
Mok resigned from HollisWealth on Oct. 17, 2012. At that time, he ceased making regular payments to clients and other individuals who had provided the monies. He did state that he liquidated his personal investments and savings in order to try to repay those individuals. On July 14, 2014, Mok filed a “notice of intention to make a proposal” under Canada’s Bankruptcy and Insolvency Act.
“There is little to no prospect of the clients and other individuals who advanced the monies to the respondent from recovering their funds,” according to the agreed statement of facts.
That same statement notes that HollisWealth was named as a defendant in a civil claims lawsuit commenced by the clients and individuals in question following Mok’s resignation.
Mok’s second infraction is failing to fully co-operate with the MFDA’s investigation, which began in March 2013. Although he did provide a letter that explained the purpose of the financial arrangements under investigation to MFDA staff in April 2013, he deflected multiple attempts by the MFDA to receive more information after that date.
“Staff was unable to determine the full nature and extent of the Respondent’s misconduct and, in particular, whether he solicited, accepted and/or failed to account for additional monies from the clients and other individuals identified during the investigation, or from clients and individuals who were not identified during the investigation,” according to the agreed statement of facts.
Mok is no longer registered in the securities industry in any capacity.