An Ontario Securities Commission (OSC) hearing panel has upheld the decision of an OSC director ordering that the registration of Christopher Reaney, a mutual fund representative, be suspended for six months after he was found to have blank, pre-signed client forms.
The OSC released its decision Tuesday after Reaney, who was ordered suspended for six months by an OSC director in January, appealed the suspension.
The hearing panel has now ruled against him, siding with the initial decision and ruling that Reaney should be suspended in order to send a message to both the mutual fund rep and the investment industry in general.
See: OSC stays fund rep’s suspension
According to the hearing panel’s decision, Reaney admitted that he had obtained blank, pre-signed forms from some of his clients when his firm, IPC Investment Corp., uncovered this in a routine audit. IPC then notified the Mutual Fund Dealers Association of Canada (MFDA) of the finding. The MFDA investigated, but decided not to pursue enforcement action. Instead, it closed the case with a warning letter.
After receiving a copy of the MFDA’s warning letter, the OSC launched its own review of the case, which resulted in the decision to suspend Reaney for six months. That suspension was stayed, pending his appeal. Now, the OSC hearing panel has ruled that a suspension is warranted.
“We view this outcome as necessary to impress upon Mr. Reaney the need to comply with regulatory and internal policy requirements even when those requirements may seem inconvenient,” the hearing panel’s decision says, adding that a suspension is necessary “in order to sufficiently protect investors and to foster confidence in the capital markets.”
In addition, the hearing panel notes that the decision sends a message to the investment industry, saying in its decision that the suspension, “alerts individual registrants and firms that misconduct of this kind attracts meaningful consequences.”
Reaney’s suspension is slated to start 10 business days following the decision.