The Mutual Fund Dealers Association of Canada (MFDA) has permanently banned and fined James Howard Munro Stuart and Michael Raymond McBurney, both of whom are former advisors with failed mutual fund dealer W.H. Stuart Mutuals Ltd.
The two former representatives were banned permanently following disciplinary hearings for failing to co-operate with the self-regulatory organization’s (SRO) investigation into W.H. Stuart Mutual. In addition to the bans, both men were also each fined $75,000 and ordered to pay $7,500 in costs.
The sanctions came after MFDA hearing panels concluded that the SRO’s staff proved their allegation that the two former reps have failed to co-operate with an investigation by failing to attend interviews with MFDA investigators.
According to the MFDA’s notice of hearing, Stuart is the son of the firm’s founders and was registered as a rep between 1993 and 2012. The MFDA says that in letters to the regulator, he claimed that he resigned from the firm in 1999 and he “did not agree to participate in an interview with staff to give information with respect to the matters under investigation.”
In the MFDA’s notice concerning McBurney, the SRO indicates that he was senior vice president of sales and marketing with W.H. Stuart Mutuals. The MFDA notes that he also claimed that he had not been registered in the securities industry in Canada for several years, and did not respond to inquiries from MFDA staff.
In both cases, the MFDA alleged that the men failed to co-operate and did not attend requested interviews with the regulator’s staff, which prevented them from carrying out a full investigation into the firm.
So far, the MFDA Investor Protection Corp. (MFDA IPC) has paid out almost $7 million in connection with the bankruptcy of W.H. Stuart Mutuals, which was suspended by the MFDA and deemed insolvent by the MFDA IPC in 2013.
See: MFDA IPC pays out $7 million in WHS claims