A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) has permanently banned former missing British Columbia financial advisor Harold Backer and fined him $2.7 million, the MFDA announced Monday.
The MFDA panel found Backer:
- failed to repay more than $700,000 that he solicited from several investors to invest in fictitious mutual fund;
- fraudulently induced at least 10 clients to invest in non-existent mutual funds; and
- failed to co-operate with an investigation by MFDA staff.
His fine will be reduced by any amounts he repays to his victims under a court-issued restitution order, the panel stated.
Backer was a rep with mutual fund dealer Investia Financial Services Inc. from 2005 to 2015. Previously, he was with Cartier Partners Financial Services Inc. and its successor, Dundee Private Investors Inc.
According to the MFDA’s notice of hearing, Backer created a prospectus for a family of four fictitious mutual funds in 1999, which allegedly raised more than $1.23 million from eight investors between 2002 and 2015.
Backer was terminated by Investia after the scheme was uncovered. He disappeared in November 2015 after failing to return home from a bike ride. In April 2017, Backer turned himself in to police in Victoria, and was subsequently charged.
In July, a B.C. provincial court sentenced Backer to 13 months in jail after he pleaded guilty to a single charge of fraud over $5,000.
With files from the Canadian Press