May 3, 2018 (Toronto, Ontario) – A Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”) has issued its Reasons for Decision dated April 30, 2018 in connection with a settlement hearing held in Toronto, Ontario on February 20, 2018 in the matter of Sebastian Eduardo Encalada (“Respondent”).
In its Reasons for Decision, the Hearing Panel confirmed the sanctions imposed on the Respondent. In particular, the Respondent:
- is prohibited from conducting securities related business in any capacity while in the employ of or associated with any Member of the MFDA for a period of one year;
- shall pay a fine in the amount of $5,000 (“Fine”);
- shall pay costs in the amount of $5,000 (“Costs”);
- the Fine and Costs shall be payable to the MFDA as follows:
- $2,500 payable on or before the date of the settlement hearing; and
- $7,500 payable no later than 60 days from the date that the Settlement Agreement is accepted;
- if he fails to comply with payment provisions above, his authority to conduct securities related business while in the employ of or associated with a Member of the MFDA shall be immediately suspended without further notice or order of the Hearing Panel until such time as he demonstrates to the satisfaction of Staff that he has complied with the payment provisions.
In the Settlement Agreement dated February 20, 2018, the Respondent admitted that:
- between March 2015 and October 2015, he opened an account for an individual and processed 18 transactions in the account, without the individual’s knowledge or authorization, thereby engaging in discretionary trading, contrary to MFDA Rules 2.3.1 and 2.1.1; and
- between March 2015 and October 2015, he falsified an individual’s signature or initials on two account forms in order open an account and process 18 transactions in the individual’s account, contrary to MFDA Rule 2.1.1.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 82,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA’s complaint and enforcement processes, as well as links to ‘Check an Advisor’ and other Investor Tools, visit the For Investors page on the MFDA website.