A Hearing Panel of the Atlantic Regional Council of the Mutual Fund Dealers Association of Canada has fined a 30-year Nova Scotia advisor $75,000 and prohibited him from conducting any securities related business for at least five years.
The decision against Michael Andrew Harrigan follows allegations that between 2005 and 2008 Harrigan misrepresented know-your-client information on the account opening and loan application documents of seven clients. The Hearing Panel also said Harrigan misrepresented or did not fully explain the risks, benefits, costs and features of a leveraged investment strategy that he recommended and put in place for the seven clients.
In addition, it was alleged Harrigan did not perform the necessary due diligence to learn key facts about the clients when it came to the leveraged investment strategy.
The Hearing Panel fined Harrigan $50,000 plus $25,000 in costs.
Harm to clients was “significant” and long lasting”
“We note that the harm suffered by the Respondent’s clients has been significant and long lasting,” said the Panel in making its decision. “Prior to dealing with the Respondent, these individuals had little experience investing and had no experience with leveraging to invest. They placed their complete trust in the Respondent and in our opinion he clearly betrayed them.”
Harrigan disagreed with the penalties and fines, arguing he should only be banned from conducting securities business for a year and a fine of no more than $20,000 plus $10,000 in costs.