The penalties imposed against financial advisor Edward Rempel early this year were intended to act as a deterrent to Rempel and other advisors, according to a document released by the Mutual Fund Dealers Association of Canada (MFDA). Rempel, an advisor based in Brampton, Ont., was recorded trying to persuade a client to withdraw part of a complaint against him. The MFDA issued to Rempel a $100,000 fine and a temporary prohibition.

“Those who attempt to deceive MFDA enforcement staff about the nature and extent of their conduct during the course of a regulatory investigation will be held accountable,” the MFDA hearing panel states in its “reasons for decision of penalty” document released Monday.

In a decision that was made public in November, Rempel was prohibited from conducting securities-related business for any member of the MFDA until Aug. 5, 2018. If Rempel should re-register at that point and be employed with an MFDA member, he is to be strictly supervised for one year. He was ordered to pay costs of $25,000 in addition to the $100,000 fine.

See: Advisor fined, prohibited from “securities-related business” for three years

The penalties surround Rempel’s actions toward one client, referred to as “KS,” who had lodged a complaint against Rempel to the MFDA in 2011. During a conversation that occurred in September of that year, the advisor offered to compensate KS for deferred sales charges related to the collapse of the client’s leveraged investment strategy, the subject of the complaint, if KS would withdraw that complaint and keep the arrangement a secret.

KS recorded the conversation without Rempel’s knowledge and then sent that audio file to the MFDA. However, when the MFDA asked Rempel about the nature of the conversation, he denied that he had tried to persuade his client to withdraw the complaint and that he had attempted to negotiate a settlement with KS without the prior written consent of Rempel’s firm, Armstrong and Quaile Associates Inc. (The firm was bought by Windsor, Ont.-based Sterling Mutuals Inc. in June.)

The MFDA states that, in its effort to establish appropriate penalties for the infractions, it took into account the fact that Rempel had no prior disciplinary proceedings and the letters of support from four clients who expressed their gratitude for his investment advice over the course of several years.