IIROC, MFDA ban former advisor for off-book investments

A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has banned, and ordered disgorgement from, a former advisor who arranged the off-book purchase of high-risk syndicated mortgage investments, the self-regulatory organization said in a release on Wednesday. In a January decision, the Mutual Fund Dealers Association (MFDA) banned the advisor for similar misconduct.

Dean Martin Jenkins was a registered representative with the St. Catharines, Ont. branch of Edward Jones at the time of the infraction, according to the IIROC penalty decision, dated March 24.

Between November 2013 and Feb. 12, 2016, Jenkins facilitated $980,000 of off-book syndicated mortgage investments for 11 clients and seven other investors without his firm’s knowledge, the decision said.

Jenkins received $55,450 net compensation for his role in the sales, and the IIROC hearing panel ordered disgorgement of the same amount. Jenkins must also pay costs of $2,500.

In January 2021, a hearing panel of the MFDA permanently banned Jenkins, fined him $30,000 and ordered that he pay costs of $2,500 for similar misconduct.

On Feb. 22, 2016, Jenkins registered with MFDA member FundEX Investments Inc., the MFDA decision said. That year, Jenkins continued to recommend, sell or facilitate the sale of more than $1 million of the same investments to another 11 clients and five other investors without his firm’s knowledge, according to the decision. He received almost $29,000 net compensation.

In the MFDA proceedings, Jenkins admitted he misled his firm about his compensation. He also admitted he obtained and possessed 70 pre-signed account forms for 45 clients. In some instances, he used the forms to process transactions.

The IIROC hearing panel elected not to fine Jenkins to be “consistent with the MFDA decision to reduce the fine and the costs it would have otherwise ordered,” so as to align with Jenkins’ ability to pay.

The MFDA decision said Jenkins had no previous MFDA disciplinary history. No evidence existed that he benefited financially from the pre-signed forms; nor did evidence exist of associated client complaints or losses regarding the forms, or a lack of authorization for the underlying transactions.

Staff

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