A hearing panel of the the Mutual Fund Dealers Association of Canada (MFDA) has approved a settlement which imposed sanctions on Markham, Ont.-based Equity Associates Inc. (EA) for failing to properly supervise and keep adequate records over a four-year period from 2012 to 2016, the MFDA announced on Thursday.
The sanctions include a $125,000 fine, and costs of $20,000.
Specifically, EA admitted in the settlement agreement that it failed to adequately supervise, or failed to maintain adequate records of the supervision of daily trading activity, approval of new accounts, approval of amendments to know-your-client (KYC) information, and leveraged accounts.
The mutual fund dealer also admitted that it failed to establish, implement and maintain adequate policies and procedures to conduct trend analysis reports to supervise its reps’ trading activity; failed to maintain adequate compliance resources; and failed to adequately supervise, or failed to maintain adequate records of the supervision of uniformity of certain client KYC information and concentration of sector mutual funds in client accounts.
Furthermore, EA admitted it failed to conduct reasonable supervisory investigations concerning two of its reps, one of whom was criminally charged for alleged conduct involving clients and other individuals.