FundEx Investments Inc. of Markham, Ont., has been fined $70,000 by the British Columbia Securities Commission for trading mutual funds and accepting clients in the province without being registered to do so.
News of the settlement comes just weeks after FundEx agreed to pay a total of $65,000 in fines to the Alberta and Saskatchewan securities commissions for doing business in those provinces without being properly registered.
In the settlement with the BCSC, FundEX agreed it opened mutual fund accounts for at least 286 B.C. clients and made trades worth more than $1.3-million on their behalf, even though it wasn't registered in B.C. in any capacity. The trades earned FundEX $60,000 in commissions since January, 1999.
In an investigation into FundEX's activities, the BCSC found that the company also traded securities in Quebec, Nova Scotia and Prince Edward Island between August, 1995, and July, 2000, without the proper authorization.
A FundEx employee in Markham said yesterday that it was up to the company's president Robert Goodish to comment on the settlement. However, he said Mr. Goodish was not available.
BCSC spokesman Dean Pelkey said FundEX's problems may stem from a lack of proper internal supervision rather than any attempt to intentionally flout provincial securities laws.
"Someone in FundEX's offices didn't pick up on the fact that the company had 286 clients in B.C. without being registered," he said. "Normally a compliance office would pick that up."
In reaching the settlement, Mr. Pelkey said the BCSC took into the account the fact that it has received no complaints from any of the company's B.C. clients. Under its arrangement with the BCSC, FundEx has agreed to apply to become registered in B.C. and will be allowed to provide services to its existing clients until Jan. 31, 2000.