A former mutual fund salesperson has been fined $10,000 by the Mutual Fund Dealers Association of Canada for selling clients shares in a private company without approval from his firm.
Stanley Wayne Parke, who was registered as a mutual fund salesperson in Alberta and Saskatchewan with Sun Life Financial Investment Services (Canada) Inc. from December 2002 to December 2009, has also been prohibited for 10 years from conducting securities related business while employed by or associated with any MFDA member.
The MFDA found that in 2002, Parke entered into an agreement with the founder of a company called ExtremeSpeed Inc. (EXS), which held itself out as a developer and vendor of Internet related hardware. Parke agreed to assist some original shareholders of EXS in selling some or all of their shares to new investors, and to assist EXS generally in expanding its shareholder base. In exchange, Parke would receive a commission or finder’s fee of 25 cents for every EXS share that was sold.
EXS was not a reporting issuer, and its shares did not trade publicly on an exchange. Its shares were not approved by Sun Life for sale by its reps.
Between November 2002 and 2006, Parke sold or facilitated the sale of EXS shares to at least 59 individuals, 13 of whom were clients of Sun Life. Those 13 clients purchased a total of at least $135,000 of EXS shares, and to the best of Parke’s knowledge, they’ve lost the entirety of their investments.
Parke received approximately $25,000 in compensation for the sale of the shares, and did not disclose this compensation to Sun Life.
In addition to the $10,000 fine, Parke has been ordered to pay costs of $5,000 in the MFDA settlement agreement.
He is no longer registered in the securities industry in any capacity.