A former Mission resident who worked as a financial adviser in Abbotsford has been permanently banned from conducting “securities-related business” and ordered to pay a $75,000 fine and $10,000 in costs.
The ruling was made last Thursday against Michael Labrick Harvey by the Mutual Fund Dealers Association (MFDA) of Canada following a disciplinary hearing for which Harvey did not show up.
The three-person panel ruled that Harvey failed to co-operate with an investigation by the MFDA, despite repeated requests for an interview, starting in May 2010.
According to the MFDA “notice of hearing” from August 2011, 19 clients issued 12 complaints about Harvey’s conduct as a mutual fund salesperson.
He was employed in Abbotsford by the Investors Group Financial Services Inc. from 2005 to 2008 and Canaccord Capital Corporation from 2008 until he resigned in February 2010.
The complaints allege that Harvey made “unsuitable leveraging recommendations,” falsified client signatures and initials, and falsified information on account documents between December 2006 and September 2008.
Leveraging involves the borrowing of capital to increase the potential return of an investment.
The clients also allege that Harvey failed to inform them that mutual funds bought for their accounts had been purchased on a “deferred sales charge,” resulting in their incurring substantial fees when the investments were redeemed.
In one complaint detailed by the MFDA, a client alleged that some of the signatures and initials on documents in his file were not his, his listed income had been inflated, and his risk tolerance had been listed as “high” when it should have been “medium.”
In another case, a couple who had invested $300,000 in a leveraging plan lost $105,000, and alleged that Harvey had made unsuitable recommendations and had not explained the associated financial risks.
They also alleged that their signatures and/or initials had been falsified on 16 documents in their file, personal income had been inflated, and their risk tolerance was incorrectly recorded as “high.”
The complaints were first addressed by Investors Group, which found sufficient evidence to back the clients.
“As a result, Investors Group unwound the leverage loans and investments of those clients at its own expense, among other measures,” stated the MFDA documents.
The agency then began its own investigation and concluded that Harvey had falsified client signatures or initials on at least 67 documents and provided false information to ensure the proper requirements were meant and his recommendations were approved.
In a written response to MFDA in early 2009, Harvey denied any wrongdoing and stated the complaints were a “calculated and malicious attack on my professional reputation and a manipulation of my clients by Investors Group in response to my decision to move to Canaccord.”
During his time in Abbotsford and Mission, Harvey’s community involvement included the Rotary Club of Mission, the United Way of the Fraser Valley and the Mission Regional Chamber of Commerce.
He is now believed to be residing in White Rock.