Desjardins Financial Security Investments Inc. is facing a fine of $75,000 for failing to ensure a branch manager was fulfilling his role at one of the firm’s branches, the Mutual Fund Dealers Association of Canada has revealed.
An MFDA hearing panel found that between June 2003 and September 2005, Desjardins failed to ensure that there was a qualified branch manager supervising its branch office in London, Ontario. According to the panel, Donald Cunningham, the designated branch manager at the London branch, was not fulfilling his obligations and responsibilities.
Desjardins did not sufficiently evaluate Cunningham’s ability to fulfill the obligations and responsibilities of a branch manager, and did not sufficiently train him or otherwise reasonably ensure that he was able to fulfill the role, the MFDA said.
“Reasonable inquiries by the Respondent would have revealed that Cunningham had insufficient knowledge and experience with respect to the obligations and responsibilities of a branch manager,” the MFDA’s Settlement Agreement states.
The MFDA found that Cunningham delegated many of his supervisory responsibilities, did not ensure an alternate branch manager would perform his duties on occasions when he was away, and failed to prevent an unregistered individual from engaging in securities related business with clients.
In particular, the panel found that between September 2003 and November 2004, Anthony McPhail, an unregistered individual, was engaging in securities related business with clients. Desjardins failed to implement adequate internal controls and to employ adequate supervision to prevent this from occurring, according to the MFDA.
In addition, once Desjardins received information about this activity, it failed to conduct reasonable supervisory investigations, the MFDA found. Desjardins also failed to take supervisory and disciplinary measures.
On May 6, the MFDA ordered that Desjardins pay a fine of $75,000 and costs of $15,000.
On Thursday, the MFDA hearing panel issued its reasons for decision in connection with the settlement hearing.
IE
DFS Investments fined $75,000 over London branch manager
- By: Megan Harman
- May 21, 2009 May 21, 2009
- 16:53