A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has imposed a fine of $950,000 on a former advisor who admitted he borrowed more than $1 million from clients for an unauthorized outside business activity.
Jason Perry Boldt, of Edmonton, has also been ordered to pay costs of $7,500 for infractions that include not informing his firm that he was a director, shareholder, and/or principal of three corporations and not co-operating with the MFDA’s investigation into the matter, according to the self-regulatory’s organization’s (SRO) agreed statement of facts released on Thursday.
All three infractions took place between 2010 and 2015 when Boldt was a mutual fund representative with Professional Investment Services (Canada), which was bought by Richmond Hill, Ont.-based Global Maxfin Investments Inc. in 2011 and at which Boldt continued to be employed until October 2014.
Boldt admits that he borrowed a combined total of $1.33 million from eight clients. In each case, he informed the client that the loan would be invested in Spectra Investment Corp., in which Boldt was a director.
Boldt made interest payments of a combined total of $517,000 to the eight clients.
The situation gave “rise to a conflict or potential conflict of interest, which the respondent failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients,” according to the agreed statement of facts.
Global Maxfin was unaware of Boldt’s outside business activities with Spectra and two other connected corporations and was only informed in August 2014, when two clients submitted a complaint to the firm against Boldt.
Boldt’s failure to disclose his involvement with the three corporations impeded the firm’s ability to supervise his activities, the agreed statement of facts notes.
In addition, Boldt didn’t co-operate with the SRO during its investigation into his actions in 2015. Although Boldt and MFDA were in contact during the investigation and spoke about a possible interview on the matter, he has never attended an interview.
In May 2015, the former advisor sent an email to MFDA staff, indicating that an interview would be unnecessary: “I would like to agree that I violated MFDA rules by having outside business activities…That being said, I don’t think there is a need for a meeting. I no longer hold a licence and am willing to accept whatever fine the MFDA sees fit to apply to me.”
Global Maxfin terminated Boldt in October 2014 and he has not been registered in the industry since then.
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