A Simcoe man has been fined and permanently prohibited from the securities-related business.
Ron Kowalsky, 72, who sold mutual funds through Sun Life Financial for about a decade, was found guilty of misconduct by the Mutual Fund Dealers Association of Canada, the regulatory body that oversees the sale of mutual funds.
In a decision released last month, he was ordered to pay a fine of $40,000 and costs of the investigation of $2,500.
Kowalsky, who represented Sun Life Financial Investments from January 1999 until his resignation in August 2019, worked in Simcoe and the area.
In an agreed statement of facts, he admitted to contravening his company’s policies by getting involved in high-risk syndicated mortgage investments – business conducted outside of his firm’s knowledge.
Kowalsky agreed with investigators that, from 2013 to 2016, he handled the sale of the investments totaling more than $500,000 and received compensation for those sales.
He conducted the deals without the knowledge or approval of Sun Life and was paid more than $12,000 in fees. His clients ended up losing about $260,000.
Two clients complained about their losses and that brought the matter to light.
After Kowalsky’s resignation, Sun Life reviewed his files and discovered that, from 2015 to 2019, he had used pre-signed and photocopied signature pages for 11 clients.
Getting clients to pre-sign forms or copying signature pages from previous orders for new orders are breaches of the Mutual Fund Dealers Association rules and both are considered falsification of signatures.
In addition to his fines, Kowalsky can no longer do securities business even if working with another MFDA member.
Investigators found no evidence Kowalsky did anything to cause the investment to fail or was involved in the high-risk venture other than recommending the transaction.
He ended up selling his home and began paying $500 each month to pay off his creditors. The MFDA said Kowalsky had been driving a taxi to earn additional income.
The MFDA oversees about 76,000 mutual fund advisers across Canada.
It takes on hundreds of complaint cases each year and, last year conducted 95 disciplinary hearings.
Kowalsky was a journalist for almost 30 years and was the former managing editor of the Simcoe Reformer.
He was inducted into the Norfolk County Sports Hall of Recognition in 2016 for being a driving force behind the hall and a vocal proponent of local sports needs.
@EXPSGamble