TORONTO, Sept. 28, 2021 /CNW/ - The Mutual Fund Dealers Association of Canada ("MFDA") commenced a disciplinary proceeding in respect of Scott Charles Nichols (the "Respondent") by Notice of Hearing dated December 31, 2020.
An appearance in this proceeding was held today by videoconference before a Hearing Panel of the MFDA's Atlantic Regional Council.
As the result of a settlement agreement entered into between Staff of the MFDA and the Respondent, a settlement hearing will take place before a Hearing Panel of the MFDA's Atlantic Regional Council by electronic hearing on September 30, 2021, commencing at 10:00 a.m. (Atlantic), or as soon thereafter as the matter can be held. Members of the public who would like to obtain particulars should contact email@example.com.
The subject matter of the proposed settlement agreement concerns matters for which the Respondent may be disciplined pursuant to ss. 20 and 24.1.1 of By-law No. 1 of the MFDA. In particular, the settlement agreement concerns allegations that the Respondent:
between September 2013 and April 2014, allowed an unregistered individual to open new accounts at the Member and make investment recommendations for clients who the Respondent had not met, thereby facilitating stealth advising by the unregistered individual and failing to perform the necessary due diligence to learn the essential facts relative to the clients, contrary to MFDA Rules 2.2.1 and 2.1.1;
between April 2014 and September 2014, signed and submitted account forms to process switches and redemptions in the investment accounts of a client who the Respondent had not met, based on instructions received from a third party who did not have trading authorization on the accounts without confirming the trading instructions with the client, thereby engaging in unauthorized trading in the client's accounts, contrary to MFDA Rules 2.3.1(a) [now MFDA Rule 2.3.1(b)], 2.1.1, 2.5.1 and 1.1.2; and
in April 2014, in response to a supervisory query from the Member, signed and submitted a client's Know-Your-Client ("KYC") update form as the Approved Person responsible for servicing the client's account when he had not communicated with the client to obtain instructions concerning the KYC update, thereby failing to learn the essential facts relative to the client and preventing the Member from ensuring that the investments in the client's account were suitable for the client, contrary to MFDA Rules 2.2.1 and 2.1.1.
MFDA settlement hearings are typically held in the absence of the public pursuant to section 20.5 of MFDA By-law No. 1 and Rule 15.2(2) of the MFDA Rules of Procedure. If the Hearing Panel accepts the settlement agreement, then the proceeding will become open to the public and a copy of the decision of the Hearing Panel and the settlement agreement will be made available at www.mfda.ca.
A copy of the Notice of Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Notice of Hearing, the Respondent conducted business in the Kentville, Nova Scotia area.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 80,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA's complaint and enforcement processes, as well as links to 'Check an Advisor' and other Investor Tools, visit the For Investors page on the MFDA website.
SOURCE Mutual Fund Dealers Association of Canada
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