The Mutual Fund Dealers Association of Canada (MFDA) has fined a former fund salesman $75,000 and permanently banned him for failing to cooperate with its investigation.
Daniel Yanaky was registered as a mutual fund sales person with IPC Investment Corp., conducting business from an IPC branch office in Mississauga, Ont.
In January 2012, IPC was contacted by lawyers alleging that Yanaky had recommended that clients invest in an outside business activity. One of the clients allegedly invested $430,000 as a result of Yanaky’s recommendation.
Following receipt of a report from IPC mentioning the allegations, the MFDA requested Yanaky provide a written response to them. Yanaky did not provide the requested information to MFDA investigators.
At an MFDA hearing panel held in Toronto on Jan. 19-20, Yanaky confirmed that he acted as an intermediary between an individual (WM) attempting to set up a charitable trust “for the purposes of receiving substantial amounts of money.” The funds allegedly were located offshore and had been seized by the Canadian government.
WM was looking for investors to help cover the cost of setting up the trust, known as the Western Project. Yanaky confirmed that he acted as an intermediary between the trust and investors by arranging the delivery of investment monies.
Evidence at the hearing confirmed that the trust “was not an investment or outside business activity” known or approved by IPC, and that Yanaky did not disclose his involvement in the trust to IPC.
“There is no evidence that the Western Project was a legitimate investment opportunity,” the panel said in its reasons for decision, published Thursday.
For failing to provide a written statement to the MFDA, Yanaky was fined $75,000 and permanently prohibited from conducting securities related business in any capacity while in the employ of, or associated with, any MFDA member firm. He must also pay $5,000 in costs.
Yanaky is not currently registered in the securities industry in any capacity.