A former financial advisor in Ontario must pay a $50,000 fine to the Mutual Fund Dealers Association of Canada (MFDA) for recommending and selling unauthorized investment products and engaging in personal financial dealings with clients.
According to MFDA documents, between September 2007 and June 2011, Barry Hunt recommended a client invest in two real estate properties, the Brockville Real Estate Investment and Marsden Renovations. Neither of these investments were approved by Waterloo, Ont.-based Armstrong & Quaile Associates Inc., Hunt’s employer at the time, nor did the ex-advisor seek approval of the investments from the firm.
Furthermore, the same client personally loaned Hunt $120,000 in order for him to finance the operation of a property he owned. Hunt verbally agreed to pay interest payments of $800 per month for the loan.
Finally, in 2008, Hunt sold interest in another property he personally owned to three clients – including the individual mentioned above – and 11 other individuals. At no time did Armstrong & Quaile give approval for such an investment.
The investigation into Hunt’s activities originated with a complaint from the brother and sister-in-law of the client invested in the Brockville and Marsden projects. The brother and sister-in-law were the client’s powers-of-attorney. Hunt repaid the loan and reimbursed the client for her investments. In regards to Hunt’s property, everyone except that client continues to hold their interest in the investment.
In addition to the fine, Hunt is banned from acting as a mutual fund salesperson for seven years and must pay $5,000 in costs.