OSC won’t oppose rep’s re-registration

Duffy was seeking registration with Sterling Mutuals Inc. OSC staff could have opposed his application for re-registration amid concerns about his suitability, which would create the possibility of a hearing, but, instead, they reached a settlement.

The settlement notes that FundEx repeatedly found the rep in possession of blank un-signed forms, which is prohibited by its policies and procedures. FundEx says Duffy was required to sign a statement that he was aware of, and would abide by, FundEx’s policies and procedures. After the same deficiencies were uncovered, in 2010, Duffy was placed under strict supervision.

In February of this year, the Mutual Fund Dealers Association of Canada (MFDA) sent a warning letter to Duffy about, among other things, his use of pre-signed forms to facilitate client transactions. Ultimately, in March, FundEx terminated Duffy citing, among other things, his repeated use of pre-signed forms.

The settlement states that Duffy admits that he obtained and used pre-signed forms, and that he did not comply with the policies and procedures of FundEx, or with any of the undertakings he signed. However, it also states that there were no complaints against him, he did not use pre-signed forms to process any transaction that was not authorized by a client, the pre-signed forms were used to deal with “an overwhelming workload”, he has recently hired an assistant, he takes full responsibility for his actions, he cooperated with the OSC and he has suffered financial and reputational harm as a result of his conduct.

To resolve the case and avoid a hearing, Duffy agreed to withdraw his application for registration and will not reapply for nine months, and he agreed to successfully complete the Conduct and Practices Handbook Course before reapplying.

The OSC agreed not to recommend against Duffy’s re-registration, and if he is re-registered, he would be subject to certain terms and conditions for one year, including that he be subject to strict supervision by his sponsoring firm, which must submit monthly supervision reports to the OSC and the MFDA.

The agreement notes that period of time that Duffy is to be refused registration “is consistent with other relevant decisions”.

It also notes that Duffy has recognized and acknowledged his misconduct and has taken steps to minimize the chance that his misconduct will be repeated in the future.

The agreement adds that the terms and conditions imposed on Duffy provide a means to detect or prevent the future use of pre-signed forms.