The Mutual Fund Dealers Association of Canada (MFDA) has fined and permanently banned a former advisor in Manitoba for misappropriating more than a quarter of a million dollars from his clients, in part, to fuel a methamphetamine addiction.
The self regulatory organization announced on Monday that Jeffrey Gordon Cox has been permanently banned, fined $240,000, and ordered to pay costs of $10,000, after an MFDA hearing panel ruled that he failed to deal fairly and honestly with clients.
Cox was accused of misappropriating at least $274,600 from 11 clients and 23 others (including 21 insurance clients and two non-clients, who were the children of clients), between October 2012 and August 2013. During the time, he was registered as a mutual fund salesperson with Sun Life Financial Services (Canada) Inc. in Manitoba. He resigned from the firm in 2013, and has not been registered since then.
According to the MFDA’s allegations against him, Cox misappropriated the money largely by selling short-term (30- to 90-day) promissory notes bearing high rates of interest (between 8% and 20%). “In most cases, [Cox] led the clients and individuals to believe that they were investing in a [Sun Life] product with names such as the ‘Sun Life Gratuity Double Up’ program or the ‘Spring Forward with Sun Life Employee Sponsorship Program’,” the MFDA notice of hearing says.
The notice of hearing indicates that Sun Life conducted an investigation into Cox’s alleged misconduct, and reimbursed all of the victims in the case. Cox admitted to being addicted to methamphetamine, and using the money he took to finance his drug addiction, the notice of hearing adds.
The sanctions were handed down following a disciplinary hearing that was held on Dec. 17 in Winnipeg. The reasons for its decision will be issued in “due course”, the MFDA says in a statement.