A Kelowna-based mutual fund dealer has agreed to a $30,000 fine and six-month suspension from conducting securities-related business in any capacity, after trying to use personal funds to make a client whole.
Matthew Eronus agreed to the settlement with the Mutual Fund Dealers Association of Canada (MFDA, now the Canadian Investment Regulatory Organization) after conceding several contraventions of securities rules.
The trouble for Eronus began during the March 2020 stock market crash induced by the COVID-19 pandemic restrictions, according to the settlement agreement.
Then, a client directed Eronus to convert their funds into a cash product, on March 19, 2020. However, since Eronus had not updated his “know-your-client” information on the client, he was not able to convert the funds until March 23. As a result, the client lost $5,000 from their $128,000 portfolio in that time.
Contrary to rules, Eronus did not report the client’s complaint to his dealer Sun Life Financial but rather, offered to put $5,000 of his own money into the client’s account and encouraged the client to keep money in the market for another year with a promise to earn more money back.
“How I do that is going to have to be a little sneaky because there’s a rule about me basically comping you back,” Eronus told the client by telephone.
Following the exchanges, Eronus made “false or misleading” statements to Sun Life and the MFDA, by denying he offered to pay compensation to the client.
Eronus has already paid $20,000 to Sun Life, according to the settlement agreement.
