A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has fined and suspended Rodney Warren — a representative first with Aegon Dealer Services Inc., which later became Investia Financial Services Inc., and later with Portfolio Strategies Corp. — and banned him from using leverage with clients after finding that he violated suitability rules in connection with a leverage recommendations.
The MFDA hearing panel ordered that Warren should be suspended for 90 days, fined $100,000 and ordered to pay costs of $10,000. He is also banned permanently from leveraging clients; once the suspension is up, he is to be subjected to 12 months of strict supervision, followed by another 12 months of close supervision.
The panel did not immediately issue its reasons for the penalties handed out in the case.
According to the panel, in an agreed statement of facts, Warren admitted to failing to ensure that leverage recommendations were suitable for two pairs of clients. Following a hearing, the panel also found that he failed to report a complaint to his dealer and attempted to negotiate a settlement with two clients without the dealer's knowledge. The MFDA hearing panel dismissed a third allegation against him.
The statement of facts indicates that both sets of clients have been compensated for the losses they suffered due to the leveraged investment strategy. It also notes that Warren co-operated with the MFDA and that this is his first disciplinary violation. In addition, the statement of facts adds that Investia entered a settlement with the MFDA in 2012 to address deficiencies in its supervision of leveraging, among other things.
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