Ontario fund rep suspended, fined $20,000

A settlement hearing in the matter of Scott Devries was held yesterday in Toronto before a hearing panel of the MFDA’s Central Regional Council.

From June 2002 to December 2009, Devries was registered in Ontario, British Columbia, Alberta and Quebec as a mutual fund salesperson with FundEX Investments, which became a member of the MFDA on April 12, 2002.

The company terminated Devries on December 10, 2009 as a result of the events described below. He is not currently registered in the securities industry in any capacity.

In the settlement agreement, Devries admitted:

i) between about August 2002 and October 2009, he engaged in personal financial dealings with clients by borrowing $426,350 from 8 clients, either personally or through his businesses, Devries Financial Group Inc. or Frontex Reporting Systems Inc. He thereby gave rise to conflicts or potential conflicts between himself and the clients that he failed to ensure were addressed by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4 and 2.1.1;

ii) between about September 2004 and December 2009, he engaged in securities related business that was not carried on for the account of the member and through the facilities of the member by selling shares and convertible debentures of Frontex to 15 clients and other individuals, contrary to MFDA Rule 1.1.1;

iii) between about September 2004 and December 2009, he engaged in personal financial dealings with 9 clients by selling shares and convertible debentures of Frontex to the clients, thereby giving rise to conflicts or potential conflicts of interest between himself and the clients that he failed to ensure were addressed by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4 and 2.1.1; and

iv) commencing in December 2010, he failed to provide information and documentation requested by MFDA Staff during the course of an investigation, when he failed to answer undertakings on a timely basis that he had given during an interview with MFDA Staff, contrary to section 22.1 of MFDA By-law No. 1.

The hearing panel approved the settlement agreement between Devries and MFDA Staff, as a consequence of which Devries:

• shall be prohibited from conducting securities related business while in the employ of or associated with any MFDA Member for a period of seven (7) years;
• shall pay a fine of $20,000, as follows:

i. $10,000 payable on or before November 15, 2012; and

ii. $10,000 payable on or before February 15, 2013.

• has paid costs in the amount of $5,000.

If Devries fails to pay the fine as outlined above, then without further notice, he shall summarily be permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA member.

Read the settlement agreement.

Staff

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