Two 小蓝视频 mutual fund dealers have recently been fined $15,000 and suspended from securities-related business with accredited dealers for violating various rules, including making improper recommendations and soliciting clients for unapproved investments.
In one case, the Mutual Fund Dealers Association found Prince George dealer Tuomo Tapio Kostamo, a branch manager with PFSL Investments Canada Ltd., recommended high-risk single precious metals funds for 25 clients, including five seniors.
Rules dictate that no client should have more than one quarter of their funds in any one sector and such an investment is a speculative investment strategy.
Of those seniors, one retired 70-year-old identified as JG lodged a complaint after suffering an $18,806 loss between August 2016 and November 2018, when she only had a gross annual income of $25,000 and net worth of $50,000-$100,000, according to the settlement agreement. PFSL determined Kostamo augmented JG’s risk suitability and ended up refunding her losses in March 2019.
Kostamo then contacted all the other clients to make them aware of his mistakes. An association hearing panel found him to be cooperative but nevertheless issued the suspension and fine on August 9.
Meanwhile, on August 12, a hearing panel found dealer Matthew de Haan of SunLife Financial improperly solicited seven individuals, including one client, for an unauthorized investment while acting on behalf of a third party, according to an agreed statement of facts issued by the association.
De Haan, based in Abbotsford, accepted a sales role with Impact International Secured Investments Corporation in October 2018, but before leaving SunLife, he solicited investments for Impact’s wind farm project in the United States called WinGen 7. In doing so, he violated the association’s terms, such as conducting unapproved outside securities activity and misleading an association member (SunLife).
While there was no evidence investors ultimately invested in the wind farm or that de Haan profited from his actions, he was fined and is not allowed to conduct securities-related business in any capacity while “in the employ of or associated with” any association member for the next five years.
The association is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its member companies and their approximately 80,000 licensed advisers, with a mandate to protect investors and the public interest. Investors can file complaints with it should they suspect any wrongdoings.
