A hearing panel of the Ontario Regional Council of the Mutual Fund Dealers Association of Canada has permanently banned two former reps with Cartier Partners Financial Services Inc. for participating in an illegal investment scheme.

A disciplinary hearing of Joseph Van Der Velden and Andrew Stokman was held on Friday, Oct. 14, 2005.

In addition to the permanent ban, the panel fined Van Der Velden $500,000, and imposed upon a $75,000 penalty on Stokman.

In odering the ban, the panel found that the four allegations set out by MFDA staff in the notice of hearing dated April 21, 2005, had been established.

Between May 2002 and December 2002, Van Der Velden and Stokman, who worked in Cartier’s London, Ont. office, persuaded Cartier clients to participate in an illegal investment scheme know as the “Lech Investment”, without the knowledge or approval of Cartier.

Andrew Lech operated an investment scheme though which he purported to offer individuals the opportunity to enter into “lending contracts” with himm.

Between May 2002 and December 2002, Van Der Velden facilitated the participation of Cartier clients and other individuals in the Lech Investment and in the course of doing so, accepted and failed to return or otherwise account for approximately $2.15 million.

Between May 2002 and January 2003, Stokman facilitated the participation of Cartier clients in the Lech Investment by soliciting approximately $1 million from them for investment through Van Der Velden, all of which remains owing and otherwise unaccounted for.

Between May 2002 and January 2003, the pair preferred their own interests to those of Cartier clients by recommending that they participate in the Lech Investment and by failing to provide them with written disclosure of the nature or amount of the compensation that Van Der Velden and Stokman were paid as a result.

The said panel it will release written reasons for its decision at a later date.