By Staff | September 21, 2007 | Last updated on September 21, 2007
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(September 21, 2007) Misconduct at the head office and Joliette branches of National Bank Financial resulted in penalties of nearly $900,000 being levied against the bank itself and one of its registered representatives.

The IDA has hit National Bank Financial with a $795,000 fine, after it admitted to allowing “repeated misconduct” by a team of representatives at its head office, as well as that of a rep at its branch in Joliette, Quebec.

The numerous bylaw violations stem largely from misconduct in the head office, involving improper use of options accounts and an overall failure to ensure proper compliance procedures were followed.

On top of the fine, the bank must pay $50,000 in costs. The IDA did indicate that National Bank cooperated fully with the investigation.

Regarding the irregularities at head office, the IDA also levied a $45,000 fine against Fernando Meffé, one of the registrants at the head office. Meffé admitted that between December 2000 and October 2001, he had signed account opening documents for options trading on behalf of about 100 clients, without verifying the accounts matched the clients’ risk tolerance.

He also requested that clients belonging to two other reps be approved for options trading, despite the fact neither rep was approved for options trading.

Between February 2001 and October 2001, Meffé allowed trading to occur in those clients’ options accounts without ensuring client suitability.

On top of the fine, Meffé has been banned for five years from approval in an officer category and/or in a supervisory capacity. He has also been slapped with a seven year ban from approval as a Designated Registered Options Principal or as an Alternate Registered Options Principal, and may not trade options for four months.

Meffé must also successfully re-write the Derivatives Fundamentals and Options Licensing Course within a year, will be subject to a year of close supervision and must pay $5,000 in costs.

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MD Funds shakes up U.S. offerings

(September 21, 2007) MD Funds Management has received unitholder approval to change the investment objectives of its US Large Cap Growth Fund and US Large Cap Value Fund. The assets of the MD US Small Cap Growth Fund will be merged into the fund.

As a result, U.S. Large Cap Growth will be renamed as MD American Growth Fund, with Goldman Sachs remaining as advisor on the large cap segment of the fund, but will be joined by New Amsterdam Partners.

Calamos Advisors will advise the fund primarily in respect of growth securities with a broad range of market capitalizations, while Westfield Capital Management will advise on small cap stocks.

The MD Large Cap Value Fund will be renamed as MD American Value Fund with Lord Abbett & Co. continuing as investment advisor.

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Soaring loonie inspires travel south

(September 21, 2007) The high-flying loonie, which reached parity with the U.S. dollar on Thursday, is leading Canadians to consider longer vacations south of the border, according to a poll by Investors Group.

Forty percent of survey respondents said they planned on travelling more often to the U.S., while a similar percent said they would extend the length of their visits. Cross-border shopping appears to be back in vogue, as 29% said they would head to the U.S. for a little retail therapy.

“Many Canadians believe the rising value of the loonie will enhance the quality of their vacations,” said John Wiltshire, senior vice-president, product and financial planning at Investors Group. “Forty-four per say they will have a better time traveling outside Canada because they can spend more money on food, entertainment and shopping.”

The survey found parity had the least impact on the plans of retirees, however, with 75% saying they did not plan on making any lifestyle changes.

“The Canadian dollar achieving parity with the U.S. dollar seems to be a notable psychological and emotional event for many Canadians,” Wiltshire commented. “Financially, Canadians have been feeling the impact of the rising value of the dollar incrementally, both positive and negative, ever since 2003 when the loonie began its ascent in earnest.”

But the survey found that 40% of respondents were unsure that parity would affect their investment decisions.

(09/21/07) staff


The staff of have been covering news for financial advisors since 1998.