A hearing panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada has permanently banned a sales rep and fined him $150,000 for placing his own interests above those of his client, among other violations of MFDA rules.

A disciplinary hearing for Lip Fee Chan (aka Phillip Chan) was held yesterday in Toronto, Ontario.

From September 1999 to February 2005, Chan was registered with Investia Financial Services Inc.

In its notice of hearing, the MFDA alleged that:

  1. Between June 2000 and October 2002, Chan engaged in securities related business outside of the accounts and facilities of Investia, by facilitating the participation of a client, WN, in various investments, contrary to MFDA rules.
  2. In the alternative to Allegation #1, between June 2000 and October 2002, Chan engaged in gainful occupation outside the business of Investia without so advising the firm and obtaining approval.
  3. Commencing May 2001, Chan failed to invest monies that he received for investment purposes from a client, WN, totaling $98,000, and in so doing, placed his personal interests above those of his client, WN, and failed to deal fairly, honestly and in good faith with his client.
  4. During September 2005, Chan offered to settle with WN, without the written consent of Investia and on terms that the settlement between
    Chan and the client would be confidential.

The hearing panel ordered a permanent prohibition on Chan from engaging in any securities-related business in any capacity. It also ordered Chan to pay fines in the aggregate amount of $150,000, and $7,500 in costs.

On Feb. 9., 2005, he was terminated for cause by Investia.

A copy of the Notice of Hearing is available on the MFDA Web site.