The Mutual Fund Dealers Association of Canada (MFDA) has fined mutual fund salesman Enzo DeVuono of North Bay, Ont. $150,000 for selling an unsuitable leveraged investment to clients.

A hearing panel in January found that in 2006 two of DeVuono’s clients, a husband and wife, in British Columbia, used money from a mortgage to purchase “2 for 1” margin loans. Margin calls were made on the account in 2008. Shortly after that time, the portfolio was closed and the clients were left with $285,000 in loans including their mortgage.

Leverage strategy breached suitability obligations: MFDA panel

In addition to the fine, the MFDA’s decisions and reasons document outlines the following penalties for DeVuono:

  • a three-year suspension from conducting any business under the jurisdiction of the MFDA;
  • the successful completion of the Canadian Securities Course, or any other appropriate courses, before re-registering with the self-regulatory organization;
  • close supervision for 18 months following re-registration with the MFDA; and
  • a permanent ban on the selling of leveraged investments to individuals.

The MFDA has also ordered DeVuono to pay $20,000 in costs.