A former British Columbia-based mutual fund salesperson must pay a fine of $150,000 to the Mutual Fund Dealers Association of Canada (MFDA) for entering into personal dealings with a client, unauthorized discretionary trading and misrepresentation to clients.

In December 2008, Michael Breuer, who worked in the Pitt Meadows branch of PFSL Investments Canada Ltd. at the time, entered into personal financial dealings with a client. According to MFDA documents, Breuer guaranteed a client’s principle and promised to personally reimburse her should the account fall below her initial investment of $150,000 by July 2010. The client opened the account in 2006 using money from a home equity line of credit.

In 2010 the client asked that her investments be sold and all money returned to her. The net redemption proceeds at the time was $133,080. The transaction triggered back-end load fees, however, the agreement stated the Breuer would reimburse the client for any such charges.

In order to repay the client as per the agreement, Breuer made two redemptions totaling $17,400 from another account held by the client. The MFDA investigation found that Breuer attempted to hide these redemptions from the client by requesting a change of address of the account statements from the client’s home address to Breuer’s office. The change of address was made without the knowledge or consent of the client.

In another instance, Breuer verbally advised two clients – a husband and wife – that the principal held in a non-registered account was guaranteed between 2006 and 2008, according to the MFDA. At the time, the clients had borrowed $160,000 from their line of credit to invest in the account. In 2008, Breuer provided the clients with a letter guaranteeing 100% of their principle. The clients’ account had declined in value to roughly $40,000 by December 2012. Breuer did not cooperate with the MFDA’s investigation into this matter.

Breuer was let go from PFSL in 2011. In 2012, Breuer life insurance license with Primerica Life Insurance was terminated.

In addition to the fine, Breuer is permanently banned from conducting securities related business through an MFDA member. As well, Breuer must pay $7,500 in costs.