Rep fined almost $1M for misappropriating client funds

The Mutual Fund Dealers Association of Canada has permanently banned a former rep and fined him almost $1 million for allegedly misappropriating client money and providing false statements.

The self-regulatory organization handed down its sanctions on Monday against Guy Edward Dudding, a former rep and branch manager for Investors Group Financial Services Inc. in Lloydminster, Alta. The sanctions follow a penalty hearing held remotely last week.

In an amended hearing notice, the MFDA alleged that Dudding deposited more than $700,000 from four clients into his own accounts or the account of another client. He failed to repay or account for more than $645,000 of that money.

In two cases, Dudding recommended clients redeem their investments with Investors Group in favour of other investment opportunities. The clients then sent him bank drafts, believing they were still investing through the firm, but he deposited the money into his own investment account, the notice said.

Dudding also misled Investors Group about the client money. He twice told the firm that separate deposits of more than $100,000 of client money into his own investment account were from an inheritance, and claimed another $40,000 deposit related to a vehicle he had sold a client, the notice said.

Investors Group terminated Dudding’s employment in 2019. He had been registered with the firm since 2007 and a branch manager from 2014 to 2017, the MFDA said.

Dudding also didn’t co-operate with the MFDA’s investigation, the notice said, telling staff that money from clients was invested in B.C. and Saskatchewan real estate but failing to provide supporting documentation. He also didn’t provide bank statements.

Of the four clients described in the notice, Dudding failed to repay or account for $100,000 from the first, $150,000 from the second, $155,300 from the third, and $240,000 from the fourth. The four incidents took place between 2015 and 2018.

Mark Burgess

News

Mark was the managing editor of Advisor.ca from 2017 to 2024.