A hearing panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (MFDA) has fined Sterling Mutuals Inc. $50,000 for failing to handle its business according to MFDA rules.

The hearing panel approved the settlement agreement between the MFDA and Sterling today in Toronto.

The settlement agreement concerns allegations that between January 2003 and February 2006, Sterling failed to establish, implement and maintain policies and procedures to ensure that the handling of its business was in accordance with MFDA rules and policies.

The settlement agreement also concerns allegations that, between January 2003 and February 2006, Sterling:

> failed to establish, implement and maintain a two-tier compliance structure to supervise client account activity; and

> prevented its branch managers from discharging their supervisory responsibilities by failing to establish, implement and maintain a two-tier compliance structure.

The hearing panel ordered Sterling to pay $50,000 fine, retain an independent monitor to resolve the compliance deficiencies, and pay $5,000 in costs.

The hearing panel said it would issue written reasons in due course.

A copy of the settlement agreement is available on the MFDA Web site at www.mfda.ca.