gavel enforcement regulators

A former mutual fund rep has been fined $1.6 million and banned from the industry by regulators after they found he misappropriated $1.3 million in a scheme involving fictitious investments.

A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) ordered today that Blair Harcourt Addison, a former rep with Desjardins Financial Security Investments Inc. in Mississauga, Ont., should be permanently banned, fined $1.6 million, and ordered to pay $14,700 in costs, after upholding various disciplinary allegations against him.

The panel found that Addison “misappropriated, or failed to account for,” approximately $1.32 million that he received from nine clients and six other investors for purported off-book investments; that he also engaged in undisclosed personal financial dealings with a client by borrowing more than $100,000 from them; and that he failed to cooperate with the MFDA’s investigation.

According to the MFDA’s allegations, Addison solicited at least $1.8 million from clients and other investors in the scheme to invest in fictitious guaranteed investments, and paid investors approximately $415,477, misappropriating the rest.

The panel handed down its findings and penalties today, saying its reasons will be issued at a later date. It notes that Addison did not participate in the disciplinary proceeding and wasn’t represented by counsel at the hearing.