MFDA Notice of Hearing

503238 v1

PARTICULARS

NOTICE is further given that the following is a summary of the facts alleged and intended to be relied upon by the MFDA at the hearing:

Registration History

1. From August 8, 2003 to November 27, 2014, the Respondent was registered in Ontario as a mutual fund salesperson (now known as a dealing representative) with Royal Mutual Funds Inc. (“Royal Mutual”), a Member of the MFDA. On November 27, 2014, the Respondent was terminated as a result of the matter described herein.

2. The Respondent is not currently registered in the securities industry.

3. At all material times, the Respondent conducted business in the Windsor, Ontario area.

Allegations #1 and #2 – Falsification of Client’s Signature and Misleading the Member

4. On November 13, 2014, the Respondent met with client CG in order to process a switch in client CG’s account. The Respondent provided Royal Mutual with completed trade forms for processing, and Royal Mutual processed the switch on November 14, 2014.

5. On November 20, 2014, the Respondent’s branch manager met with the Respondent and advised him that he had failed to submit an Investor Profile Form in respect of the switch described above. The Respondent advised the branch manager that an Investor Profile Form had been completed and was signed by client CG on November 13, 2014.  The Respondent and his branch manager were unable to locate the Investor Profile Form that the Respondent told the branch manager that client CG had previously signed.

6. Approximately one hour after the conclusion of the meeting with his branch manager on November 20, 2014, the Respondent submitted to his branch manager an Investor Profile Form containing the signature purportedly of client CG.

7. The Respondent falsified client CG’s signature on the Investor Profile Form prior to submitting it to his branch manager.

8. The Respondent’s branch manager reviewed Royal Mutual’s electronic document management system, and determined that the Investor Profile Form had been generated[1] in the approximate one hour period after the meeting between the Respondent and the branch manager on November 20, 2014, and not on November 13, 2014, as previously represented by the Respondent.

9. The Respondent’s branch manager also observed that client CG’s signature on the Investor Profile Form did not match the signature that was on file with Royal Mutual for client CG.

10. On November 24, 2014, the Respondent’s branch manager met with the Respondent to discuss her observations described above in paragraphs 8 and 9.

11. During the November 24, 2014 meeting, the Respondent falsely claimed that client CG had returned to the branch to sign the Investor Profile Form.

12. By virtue of the foregoing, the Respondent:
    1. on November 20, 2014, falsified client CG’s signature on an Investor Profile Form, contrary to MFDA Rule 2.1.1; and
    2. on November 24, 2014, misled the Member when he falsely represented to his branch manager that client CG had signed the Investor Profile Form, when he knew this to be incorrect, contrary to MFDA Rule 2.1.1.

NOTICE is further given that the Respondent shall be entitled to appear and be heard and be represented by counsel or agent at the hearing and to make submissions, present evidence and call, examine and cross-examine witnesses.

NOTICE is further given that MFDA By-laws provide that if, in the opinion of the Hearing Panel, the Respondent:

• has failed to carry out any agreement with the MFDA;
• has failed to comply with or carry out the provisions of any federal or provincial statute relating to the business of the Member or of any regulation or policy made pursuant thereto;
• has failed to comply with the provisions of any By-law, Rule or Policy of the MFDA;
• has engaged in any business conduct or practice which such Regional Council in its discretion considers unbecoming or not in the public interest; or
• is otherwise not qualified whether by integrity, solvency, training or experience,

the Hearing Panel has the power to impose any one or more of the following penalties:

1. a reprimand;
2. a fine not exceeding the greater of:
   1. $5,000,000.00 per offence; and
   2. an amount equal to three times the profit obtained or loss avoided by such person as a result of committing the violation;
3. suspension of the authority of the person to conduct securities related business for such specified period and upon such terms as the Hearing Panel may determine;
4. revocation of the authority of such person to conduct securities related business;
5. prohibition of the authority of the person to conduct securities related business in any capacity for any period of time;
6. such conditions of authority to conduct securities related business as may be considered appropriate by the Hearing Panel;

NOTICE is further given that the Hearing Panel may, in its discretion, require that the Respondent pay the whole or any portion of the costs of the proceedings before the Hearing Panel and any investigation relating thereto.

NOTICE is further given that the Respondent must serve a Reply on Enforcement Counsel and file a Reply with the Office of the Corporate Secretary within twenty (20) days from the date of service of this Notice of Hearing.

A Reply shall be served upon Enforcement Counsel at:

Mutual Fund Dealers Association of Canada
121 King Street West, Suite 1000
Toronto, ON M5H 3T9
Attention: Paul Blasiak
Fax:  416-361-9073
Email: pblasiak@mfda.ca

A Reply shall be filed by:

1. providing four (4) copies of the Reply to the Office of the Corporate Secretary by personal delivery, mail or courier to:
   1. The Mutual Fund Dealers Association of Canada
      121 King Street West, Suite 1000
      Toronto, ON M5H 3T9
      Attention: Office of the Corporate Secretary; or
2. transmitting one (1) copy of the Reply to the Office of the Corporate Secretary by fax to fax number 416-361-9781, provided that the Reply does not exceed 16 pages, inclusive of the covering page, unless the Office of the Corporate Secretary permits otherwise; or
3. transmitting one (1) electronic copy of the Reply to the Office of the Corporate Secretary by e-mail at corporatesecretary@mfda.ca.

A Reply may either:

1. specifically deny (with a summary of the facts alleged and intended to be relied upon by the Respondent, and the conclusions drawn by the Respondent based on the alleged facts) any or all of the facts alleged or the conclusions drawn by the MFDA in the Notice of Hearing; or
2. admit the facts alleged and conclusions drawn by the MFDA in the Notice of Hearing and plead circumstances in mitigation of any penalty to be assessed.

NOTICE is further given that the Hearing Panel may accept as having been proven any facts alleged or conclusions drawn by the MFDA in the Notice of Hearing that are not specifically denied in the Reply.

NOTICE is further given that if the Respondent fails:

1. to serve and file a Reply; or
2. attend at the hearing specified in the Notice of Hearing, notwithstanding that a Reply may have been served,

the Hearing Panel may proceed with the hearing of the matter on the date and the time and place set out in the Notice of Hearing (or on any subsequent date, at any time and place), without any further notice to and in the absence of the Respondent, and the Hearing Panel may accept the facts alleged or the conclusions drawn by the MFDA in the Notice of Hearing as having been proven and may impose any of the penalties described in the By-laws.

END.

[1] In order to generate an Investor Profile Form, a dealing representative at Royal Mutual must first electronically complete an Asset Allocation Report in relation to the relevant client.