The Mutual Fund Dealers Association of Canada (MFDA) has banned and fined a former mutual fund sales man Ontario as a mutual fund salesperson with MGI Financial Inc. $150,000 for violating MFDA rules.

A disciplinary hearing in the matter of Jose Luis Bautista was held Thursday in Toronto, before a three-person hearing panel of the MFDA’s Central Regional Council.

The panel found that the allegations set out in a notice dated Jan. 23, 2012 had been established.

Bautista was registered in Ontario as a mutual fund salesperson with from July 1, 2009 to Dec. 17, 2009, when he was terminated. Prior to his registration at MGI, he was registered in Ontario as a mutual fund salesperson with Dundee Private Investors Inc. from June 2004 to June 2009.

The panel found that between Oct. 30, 2006 and Dec. 17, 2009, Bautista:

  • continued in at least four occupations — Cygnet International Inc.; 7033451 Canada Inc. (operating as Bell Street Property); 2043969 Ontario Inc. (operating as Leisure Days” and WorldCrest Management Inc. — that were not disclosed to or approved by MGI;
  • engaged in securities related business that was not carried on for the account and through the facilities of MGI by selling or facilitating the sale of investments in the total amount of approximately $500,000 in a company outside MGI’s accounts and facilities; and
  • engaged in personal financial dealings with clients, and created a conflict or potential conflict of interest between his interests and the clients’ interests.

Dundee determined that at least 13 clients had invested in Bautista’s various outside business activities.

MGI determined, among other things, that one cleint had invested approximately $25,000 in WorldCrest and that two clients had invested approximately $236,000 in WorldCrest.

The panel permanently banned Bautista from conduct securities related business in any capacity while in the employ of, or associated with, any MFDA member. It also imposed a fine of $150,000; and costs of $7,500.

Bautista failed to attend the panel’s proceedings. To date, all subsequent attempts to locate him have been unsuccessful.