Former dealing rep banned for procedural breaches

Former dealing rep banned for procedural breaches

Former dealing rep banned for procedural breaches

Working in the financial-services industry isn’t easy. As someone in a position to affect people’s financial affairs, not only must advisors and dealing representatives work in their clients’ interests; they must also work in a way that ensures accountability.

A case in point is that of Edward Paul Clairmont. According to the MFDA, Clairmont agreed to sell his book of business to another approved person, DP, who expected to become registered with Olympian Financial Inc. (OFI) in 2016. At the time, Clairmont was registered with Worldsource Financial Management (WFM)

Clairmont agreed that after DP moved to OFI, he would transfer his clients to that firm and transfer his registration there, whereupon he would act as a licensed assistant to help DP service the transferred clients.

When DP became registered with OFI, he also moved into office space owned by Clairmont. To facilitate the transfer of the clients to OFI, DP gave Clairmont his password to OFI’s back-office system. Clairmont, or his unlicensed assistant, accessed the system to generate and pre-populate new account and know-your-client forms, account transfer forms, and transfer authorizations.

“As the Respondent was not registered with OFI, neither the Respondent nor his unlicensed assistant was authorized to have access to OFI’s back office system or the confidential information stored therein, or to use the system to generate OFI forms,” the MFDA noted.

In all, Clairmont had at least 344 clients execute the forms, each time asking them to sign the forms undated. DP never attended the meetings with the clients, but executed and dated them as if he had.

Clairmont had also failed to make the appropriate disclosures or heed policies and warnings issued to him by WFM. When DP was renting office space owned by Clairmont in 2016, he did not inform WFM of the fact that he sharing space with an individual registered with another MFDA member firm.

From 2012 to 2016, Clairmont also repeatedly obtained, maintained, and used pre-signed or altered account and transaction forms, despite being warned against it by WFM. In November 2016, he also submitted 129 “Transfer Authorization for Registered and Non-registered Investments” forms of a third-party insurance company to redeem money from his clients’ accounts at WFM and transfer it to segregated funds; he had his clients sign the forms undated so he’d be able to submit them together at once on a later date.

“There is no evidence that any clients suffered a loss as a result of the Respondent’s misconduct,” the MFDA noted. “The Respondent has expressed remorse for his actions.”

Clairmont has entered into a settlement agreement with the Mutual Fund Dealers Association of Canada (MFDA). He faces:

  • An 18-month ban from conducting securities-related business while employed by or associated with any MFDA member;
  • A fine of $50,000;
  • A requirement to rewrite and pass an ethics course; and
  • A requirement to pay costs amounting to $5,000

 

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