Former Winnipeg Consultant’s $300K Fine Upheld in Urgent Ruling

UPDATE: A former mutual fund consultant from Winnipeg has faced a major setback as his appeal against a hefty fine of over $300,000 has been officially dismissed by the Manitoba Securities Commission. This urgent ruling, released on November 24, 2023, confirms the severity of the infractions committed by Andrew Kazina, who misled his employer for more than a decade.

Kazina, who served as a mutual fund sales consultant with Investors Group Financial Services from 1992 to 2017, was found guilty of running unauthorized outside businesses and failing to disclose significant financial dealings. The Canadian Investment Regulatory Organization initially made this ruling in 2023, stating that Kazina breached conflict of interest rules, harming the integrity of the capital markets and the trust of investors.

Between 2002 and 2017, Kazina was involved in operating companies that provided financial and tax services without notifying or obtaining approval from his employer. The investigation revealed that Kazina received approximately $257,500 from various clients to invest in these outside ventures, while soliciting around $232,000 from at least eight clients to fund his businesses. These funds were improperly deposited into his personal bank accounts, raising serious ethical concerns.

The commission’s decision highlights that Kazina provided “false or misleading” information on compliance questionnaires from 2006 to 2017, denying any outside business dealings. The panel noted that Kazina’s actions posed a significant risk to investors and the overall capital markets.

In response to his breaches, the regulatory body imposed a fine of $313,000 along with an additional $30,000 to cover legal costs, alongside a permanent ban from conducting securities-related business with member companies involved in mutual funds. The commission emphasized that Kazina’s conduct was “contrary to the public interest” and had damaged the capital markets’ integrity.

Kazina attempted to appeal this decision, asserting that he had “done nothing wrong” regarding his undisclosed outside businesses. However, the Manitoba Securities Commission firmly dismissed his amended appeal, stating that the national panel had adequately considered all relevant evidence during its findings. The commission concluded that no evidence was overlooked, affirming the original ruling.

As this story develops, many in the investment community are watching closely. Kazina’s case serves as a stark reminder of the importance of transparency and ethical conduct in the financial sector. Investors are urged to remain vigilant and informed about the integrity of their financial advisors.

Stay tuned for more updates on this unfolding situation, as it continues to impact the investment landscape in Canada.