Former mutual funds dealer will get to testify

Gary
Gary Kean
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George Pretty, left, and his lawyer Jim Bennett, middle, have a chat with Francis Roy, lawyer for the Mutual Fund Dealers Association of Canada prior to the start of a hearing into allegations of Pretty’s professional misconduct in Corner Brook Monday, June 24, 2013.

CORNER BROOK  Arthur George Pretty’s lawyer had to make an argument just to confirm his client would be able to testify in his own defence at the disciplinary hearing into the mutual funds salesman’s alleged professional misconduct.

The Mutual Fund Dealers Association of Canada has accused the Corner Brook resident of failing to properly assess a series of his clients and properly explain the risks associated with investment strategies he engaged them in between 2005 and 2008.

The consequences were investment disasters for these clients and charges under the bylaws, rules and policies the association expects its members to follow.

On Monday, a five-day hearing before a panel of three people, including two industry representatives and a retired judge, began in Corner Brook.

Francis Roy, the lawyer representing the Mutual Fund Dealers Association of Canada, was barely into his opening remarks when Pretty’s lawyer, Jim Bennett, asked to be heard.

Bennett told the panel, chaired by Merlin Nunn — a retired justice from the Supreme Court of Nova Scotia, that it was his understanding that neither Pretty, nor his wife, would be permitted to testify in Pretty’s own defence.

Roy confirmed he would be objecting to the Prettys testifying because Bennett had not adhered to Rule 11 of the association’s bylaws. That rule stipulates that Bennett had to file a list of witnesses and a statement of what they were expected to say at the hearing 14 days prior to the start of the hearing.

Roy added that Pretty also did not comply with another bylaw that he provide a written statement to the association in response to the complaints filed against him and attend an interview requested by the association as part of its investigation into the allegations against him.

“We had no idea whether or not Mr. Pretty was even going to be here today,” Roy said of the lack of communication between the two sides since the investigation began in 2010.

Bennett argued that it is unusual for someone to be compelled to make any sort of statement other than a plea to the allegation made against them before the evidence is presented at a hearing.

“Mr. Pretty will be responding to the case made against him (during the hearing),” Bennett told the panel.

He added the purpose of calling his wife, Bonnie Pretty, will be to shed some light on why Pretty was unable to comply with all of the demands of the association’s investigation.

Provide written statements

Roy insisted that, if Pretty or his wife were going to testify, the association be provided with written statements outlining what they will be saying.

Nunn was not prepared to prohibit Pretty from testifying on his own behalf. He did not think it was necessary for Pretty or his wife to provide written statements in advance and ruled they could be called to give evidence.

The chair said that, if any rules were violated, then that would be taken into consideration when the panel weighs all of the evidence presented.

Besides Nunn, the two industry representatives who make up the panel include Susan Nixon of Royal Mutual Funds Inc. and Ann Etter of BMO Investments.

The original notice of hearing had indicated there were six clients whose leveraged investment strategies, as directed by Pretty, left their finances in ruins.

Roy told the panel he would only be focusing on three of these clients, although he did make reference to there being more.

Bennett objected to this also, saying Roy’s reference to more clients having been negatively impacted by Pretty’s advice only “smears” his client’s name. Bennett said these are allegations Pretty would be unable to defend himself against if no evidence is going to be brought forth about them.

The chair said the panel will only be considering the evidence against the three clients Roy will present evidence about.

Pretty has not worked in the mutual funds sales field since he was terminated in May 2010 because of the allegations against him. This hearing could result in Pretty being barred from being licenced as a mutual funds dealer.

It is also possible the Mutual Fund Dealers Association of Canada could levy fines against Pretty, though the association admits it has no power to actually collect fines and would levy significant fines as a way to make it more difficult for someone to get involved in another career involving finances.

Twitter: WS_GaryKean

Organizations: Mutual Fund Dealers Association of Canada, Supreme Court, Royal Mutual Funds

Geographic location: Corner Brook, Nova Scotia

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  • what a joke
    June 25, 2013 - 08:04

    no power to actually collect fines; what kind of joke is this ; SO CALLED: Mutual Fund Dealers Association of Canada group then;