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| From the Regulators |
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B.C. Securities Commission fines mutual fund salesperson $250,000
Stealing clients’ money warrants maximum penalty
Wednesday, September 14, 2005
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The British Columbia Securities Commission has issued its maximum penalty of $250,000 against a former White Rock, B.C.-based mutual fund salesperson, who defrauded his clients of about $1.6 million during
a six-year period.
Paul Robert Maudsley has been banned for life from trading securities, being a director or officer, and engaging in investor relations. He must also pay a $250,000 administrative penalty, the maximum fine the commission can impose on an individual, as well as almost $60,000 in costs related to the hearing.
A commission panel found that Maudsley and his company, Shaylor Management Ltd. violated the Securities Act in committing fraud when Maudsley convinced 23 clients to redeem about $1.6-million in mutual fund holdings to invest in other securities. Maudsley did not invest any of the money, instead taking the clients’ money for his own use to fund his personal and lifestyle expenses, including, a self-admitted substance abuse problem described by a witness as “his cocaine and gambling habit and alcohol addiction.”
The panel also found that Maudsley failed to deal fairly, honestly and in good faith with his clients - nearly half of whom were elderly or vulnerable.
“He simply took their money, or caused Shaylor to do so, about as stark an instance of deceit as there can be,” said the panel.
“The evidence provides clear and convincing proof that Maudsley had subjective knowledge of the deceit, and that it would result in the deprivation of others.”
Maudsley committed his violations when he was a mutual fund salesperson at Investors Group Inc.’s South Surrey Regional Office in White Rock between 1996 and 2003. He was fired from the firm on Mar. 3, 2003.
The commission panel also permanently cease-traded Shaylor’s securities in the sanctions decision. The firm is permanently banned from trading securities and must also pay an administrative penalty of $500,000, the maximum that the commission can order against it. Shaylor must also pay costs of the hearing.
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