A hearing panel of the Prairie Regional Council of the Mutual Fund Dealers Association of Canada (MFDA) have approved a settlement agreement between the MFDA and Portfolio Strategies Corp. (PSC).

Under the terms of the settlement, the panel issued a reprimand and imposed a fine in the amount of $5,000 on PSC.

The settlement concerned the failure of PSC to create and maintain adequate records of a call and its response to the call from a client concerning the conduct of its aproved person, Rodney Jacobson (whom PSC later terminated for cause).

It also dealt with the failure of PSC between November 2004 and December 2006 to conduct a reasonable supervisory investigation into Jacobsons conduct in response to a client complaint to the MFDA.

Jacobson was the subject of a previous MFDA disciplinary proceeding.

The panel accepted the fact that PSC was not aware of Jacobson’s misconduct at the time that it occurred and there is no evidence that PSC benefited in any way from Jacobson’s misconduct. There is also no evidence that any additional client harm resulted from PSC’s misconduct.

Prior to the settlement hearing, PSC made amendments to its policies and procedures and hired additional experienced compliance staff to address deficiencies that may have partially accounted for its misconduct in this case.

The hearing panel will issue its decision and reasons in due course.