Missing mutual fund rep fined $375,000 by MFDA

(May 6, 2005) In its first ever disciplinary action against a mutual fund sales rep, the MFDA has fined Robert Roy Parkinson $375,000 for bilking more than two dozen clients out of $337,000. Parkinson was also banned permanently from the securities market.

Parkinson worked for IPC in London, Ontario between November 2000 and February 2003. Parkinson’s scheme, the MFDA says, involved enticing clients to invest in a company called Glengarry Investments. However, it turned out that Glengarry was likely fictitious, not known or approved by IPC and not sold by any other firms.

In perhaps the most egregious case, Parkinson convinced the son of a client who had been diagnosed with Alzheimer’s and was living in a nursing home to invest $50,000 of his mother’s money in Glengarry. The money has never been accounted for.

“The evidence shows that the respondent engaged in a pattern of despicable conduct towards a large number of clients who looked to him for secure investments,” the MFDA said in a statement outlining its decisions and reasons for censuring Parkinson.

To its credit, the MFDA says, IPC repaid client losses amounting to $340,000.

Parkinson, who was fired by IPC in March 2003, did not appear at any of the MFDA hearings and was not represented by legal counsel. According to his sister, Parkinson’s family has filed a missing persons report and his whereabouts remain unknown, despite efforts to contact him through his parents.

The MFDA also announced this week that it had begun disciplinary proceedings against two other Ontario fund reps, Joseph Van Der Velden and Andrew Stokman.

The two are accused of engaging in securities-related business through the promotion of an investment scheme contrary to provincial securities law.

In 2002 and 2003, the two men attracted more than $3 million in the Lech Investment, “all of which remains owing and otherwise unaccounted for,” the MFDA says.

A hearing in the case is scheduled for June 2.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com