Mallard wins a round in fight with regulators

A Saskatchewan court has dismissed an attempt by regulators to derail a lawsuit brought forward by Saskatoon-based advisor Brian Mallard.

Mallard is seeking damages from the Mutual Fund Dealers Association and the Saskatchewan Financial Services Commission, alleging unlawful interference with economic interests.

Mallard has had a long-running battle with the two regulatory bodies – arguing that they intentionally interfered with his business, and that he lost both clients and money as a result. In his statement of claim, the plaintiff noted that his mutual fund sales license renewal was withheld improperly by the defendant MFDA.

“As a result, the plaintiff could not sell mutual funds to clients during a period of delay. He could not earn income during that period and he also suffered a loss of clients by his inability to service them,” the judge noted in his December 21, 2010 decision.

In their claim, the regulators argued that there was no “reasonable cause of action” against them. The MFDA stated that it was not a public official and did not exercise any statutory power in regard to the plaintiff. However, the judge noted that the MFDA was acting as an agent for the SFSC, which has the authority to investigate and inquire any person who reports to the commission.

The judge awarded legal costs to Mallard: $1,500 from the MFDA and $500 from the SFSC.

Mallard filed no defence, only a statement of claim referring to two documents: the transcript of an interview with Kent Shirley and a default judgment involving an action between Mr. Shirley’s estate and the plaintiff.

The judge said he “failed to see” how either of the documents advanced Mallard’s claim, and they were not considered in his decision.

For more on the story of Brian Mallard and Kent Shirley, see The Defiant One, (Advisor’s Edge, November 2006).

Doug Watt is an Ottawa-based writer/editor.