A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) has fined and permanently banned a former mutual fund rep in Saskatchewan, after finding that he recommended an unsuitable strategy to hundreds of clients that involved investing heavily in precious metals funds.
The MFDA panel ruled that Boyd Dean Yahn, a former rep with HollisWealth Advisory Services Inc. and later Sterling Mutuals Inc. in North Battleford, Sask., violated several MFDA rules in connection with a strategy to concentrate clients’ investments in precious metals funds (primarily gold funds).
In addition to the ban, Yahn was also fined $75,000 and ordered to pay $10,000 in costs.
MFDA staff brought four allegations against Yahn, which the hearing panel found to be proven after a disciplinary hearing. The panel has yet to issue its reasons in the case.
In handing down sanctions in the case, the hearing panel said that Yahn violated MFDA rules by recommending that at least 679 clients should concentrate their portfolios in precious metals funds, without properly assessing the suitability of the strategy on a client-by-client basis.
The panel also found that he tailored the clients’ KYC information to ensure that they could follow his recommendations, and that he failed to properly explain the risks of the strategy to clients.
Additionally, the panel found that Yahn, who was a branch manager, failed to properly supervise another rep who also recommended that clients concentrate their investments in precious metals funds.
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