A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has banned a former mutual fund advisor permanently for infractions that include engaging in personal financial dealings with a client and conducting a business activity outside of his firm.
Anthony Dorzek, of Oakville, Ont., has also been fined a minimum of $75,000 and faces costs of $10,000 for failing to account for some of his client’s funds from those personal dealings, according to the MFDA’s findings, released MFDA on Wednesday. In addition, the self-regulatory organization (SRO) found the former advisor to be unco-operative during the course of its investigation into the matter.
The misconduct began in 2010 when Dorzek was an advisor with Winnipeg-based Investors Group Inc. and continued when he left that firm in September 2011 to join Vaughan, Ont.-based FundEX Investments Inc., at which he was employed until December 2014. FundEX terminated the former advisor in 2014 because of his infractions.
The hearing panel found that Dorzek’s personal financial dealings with his client gave rise to a conflict of interest between the former advisor and his client. Dorzek’s failure to account for the client’s funds meant that Dorzek did not “deal fairly, honestly and in good faith with [his client]” and did not “observe high standards of ethics and conduct in the transaction of the business,” according to the findings.
The infractions relate to Dorzek’s relationship with his client, “DB,” who also happened to be a childhood friend. Dorzek solicited and received two payments of about $10,000 from DB on separate occasions for the purposes of investing in a real estate business. Dorzek told DB that the investments would produce a guaranteed return of 10%-15% over six months and that Dorzek would also be investing in the real estate business.
Six months after the first investment was made, Dorzek repaid DB his principal of $10,000 in addition to a payment that represented a return of 12.5% on the investment.
DB informed Dorzek in April 2012 that he needed to redeem his second investment of $10,000 prior to the six-month expiration date. Dorzek was unable to immediately retrieve DB’s funds, although he told DB that he would keep trying to do so. Then, Dorzek informed his client in December 2013 that he might not be able to recover the investment at all.
Dorzek failed to keep any documentation about the investments and to account for the $10,000 DB provided for the second investment. In addition, he did not inform Investors Group or FundEX about his personal financial dealings with DB and the investments outside of both firms.
The MFDA also found that Dorzek was unco-operative during its investigation into his conduct. The SRO made several attempts to schedule an interview between May 2015 and September 2015, but he has not provided any response to their communication.
“By failing to respond to MFDA Staff and attend an interview, the respondent has frustrated MFDA Staff’s ability to investigate the full nature and extent of the respondent’s activities,” states the notice of hearing, “and to determine the whereabouts of the monies that are owed to client DB.”
Dorzek has not been registered in the securities industry since December 2014.
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