On April 17, 2015, a settlement hearing in the matter of Avtar Singh Badasha was held in Vancouver, B.C. before a three-person hearing panel of the Pacific Regional Council of the Mutual Fund Dealers Association of Canada.
The hearing panel approved the settlement agreement between staff of the MFDA and the respondent, as a consequence of which the respondent:
- has paid a fine in the amount of $5,000;
- has paid costs in the amount of $3,500;
- shall be prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member for a period of two (2) years, commencing from the date of the Hearing Panel’s Order; and
- shall in future comply with all MFDA By-laws, Rules and Policies and all applicable securities legislation and regulations made thereunder including MFDA Rule 2.1.1.
In the agreement, the respondent admitted that between July 1, 2012 and September 30, 2012, he allowed AP, an unregistered individual, to open new accounts at the MFDA Member for 16 individuals with whom the respondent had never met. He thereby:
- failed to ensure that he performed the necessary due diligence to learn the essential facts relative to each client for whom an account was opened, contrary to MFDA Rules 2.2.1(a) and 2.1.1; and
- failed in his capacity as a branch manager to ensure business conducted at the branch was in compliance with MFDA By-laws, Rules and applicable legislation, and to supervise the opening of new accounts at the Member’s branch office, contrary to MFDA Rules 2.5.5(f)(i) and (ii).
Additionally, between September 2011 and December 2013, the MFDA says the respondent engaged in conduct unbecoming an Approved Person.
For more, read the settlement agreement.