The Mutual Fund Dealers Association of Canada (MFDA) has fined Dennis Villarin of Manitoba $250,000 for knowingly submitting incorrect documentation and recommending an unsuitable leveraged investment strategy to clients.
According to MFDA documents, Villarin was a mutual fund salesperson with WFG Securities of Canada Inc. in Winnipeg between 2006 and 2008. During that time, Villarin submitted new client account forms and loan applications for 14 clients that contained false, incorrect or misleading information.
For instance, Villarin inflated the market values of some of his clients’ residences on loan applications. As well, some applications included cash, liquid assets, investments and registered retirement savings plan (RRSP) which the clients did not own or the value of which was exaggerated.
Furthermore, Villarin had the 14 clients invest using leverage without properly explain the risks and benefits of such a strategy. The MFDA also found that Villarin failed to make sure that such a leveraged investment strategy was suitable for these clients given the investment objectives listed on their “Know-Your-Client” forms and their financial circumstances.
In June 2012, Villarin did not attend an interview as part of the MFDA’s investigation into this matter and therefore failed to properly cooperate with the self-regulatory organization.
In addition to the fine, Villarin is permanently banned from conducting securities related business while employed by an MFDA member. Villarin must also pay $10,000 in costs.