Wealth Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Wealth Professional | 29 Jan 2015, 12:49 PM Agree 0
Shoddy paperwork leads MFDA to lay big fine against former advisor
  • C. Edwin Chung CFP | 03 Feb 2015, 07:27 PM Agree 0
    I made a complaint to the MFDA about a successful IA advisor who inappropriately qualified a client in a 2/1 leverage deal. He came back the next year, trying to get her spouse to invest but he refused. He told her he could qualify her for a $30,000 loan on her net $5,000 annual income, which he did.
    In 2008 she had a margin call, which she knew nothing about and sole her assets. Checking out her paperwork I saw two different KYC's that were not signed by the client. One increased her income and net worth in able to qualify her. I notified the MFDA and gave them the paperwork. After over two years a reply came back saying that there was not enough evidence to punish the advisor.
    I gave them the smoking gun with the bullets; the Ombudsman of Financial services made the company pay back the original purchase, but without interest. This was a minimal knowledge client, what else do they need? There is much more to this story supporting the negligence of this advisor.
    I have stopped my practice of selling mutual funds due to this ruling. I have lost all respect for the governing forces. As a person of honour, I feel embarrassed!
Post a reply