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MFDA Notice of Hearing

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201710

IN THE MATTER OF A DISCIPLINARY HEARING PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Mark Lawrence Jennings

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Central Regional Council (the “Hearing Panel”) of the Mutual Fund Dealers Association of Canada (the “MFDA”) in the hearing room at the MFDA offices, located at 121 King Street West, Suite 1000, Toronto, Ontario on May 25, 2017 at 9:00 a.m. (Eastern), or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Mark Lawrence Jennings (the “Respondent”).

DATED: Jan 26, 2017

"Sarah Rickard"

Sarah Rickard

Director of Regional Councils

Mutual Fund Dealers Association of Canada
121 King St. West, Suite 1000
Toronto, ON M5H 3T9
Telephone: 416-945-5143
Fax: 416-361-9781
E-mail: corporatesecretary@mfda.ca



NOTICE is further given that the MFDA alleges the following violations of the By-laws, Rules or Policies of the MFDA:

Allegation #1: Between October 2002 and October 2014, the Respondent, or his assistants for whom he was responsible, obtained, possessed, and in some instances, used to process transactions, 25 pre-signed account forms in respect of 11 clients, contrary to MFDA Rule 2.1.1.

Allegation #2: Between August 25, 2011 and June 19, 2015, the Respondent falsified and used to process transactions, 2 account forms in respect of 2 clients, by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1.

Allegation #3: On or about January 17, 2014, on one occasion, the Respondent accepted cash from clients and used the cash to purchase bank drafts to invest in mutual funds on the clients’ behalf, thereby failing to comply with the Member’s policies and procedures, contrary to MFDA Rules 1.1.2, 2.5.1, and 2.1.1.

Allegation #4: Between February 2015 and December 2015, the Respondent failed to keep adequate records of 11 transactions, thereby failing to comply with the Member’s policies and procedures, contrary to MFDA Rules 1.1.2, 2.5.1, and 2.1.1.

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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. Since 1994, the Respondent has been registered in Ontario with Investors Group Financial Services Inc. (“Investors Group”), a Member of the MFDA. Currently, the Respondent is also registered in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrador, Nova Scotia, and Quebec.
  1. From in or around 2009 to September 2013, Investors Group designated the Respondent as a branch manager.
  1. At all material times, the Respondent conducted business in the Pembroke, Ontario area.

Pre-Signed Account Forms

  1. Between October 2002 and October 2014, the Respondent, or his assistants for whom he was responsible, obtained, possessed, and in some instances, used to process transactions, 25 pre-signed account forms in respect of 11 clients.
  1. The pre-signed account forms included transfer authorization forms, client update forms and pre-authorized contribution agreement forms.
  1. By virtue of the foregoing, the Respondent failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.

Falsified Account Forms

  1. Between August 25, 2011 and June 19, 2015, the Respondent falsified and used to process transactions, 2 Registered Education Savings Plan Withdrawal forms in respect of 2 clients, by altering information on the account forms without having the clients initial the alterations.
  1. By virtue of the foregoing, the Respondent failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.

Accepting Cash From a Client

  1. At all material times, Investors Group’s policies and procedures prohibited its Approved Persons from accepting cash from clients as follows:
    1. Cash should not be accepted. In the event that a client is unable to utilize a cheque, the client must be advised to convert cash to a negotiable instrument such as a bank draft payable to Investors Group Financial Services Inc.
  1. On or about January 17, 2014, clients SF and TF provided the Respondent’s assistant with $300 in cash, which the Respondent used to purchase a bank draft in order to invest the monies into in the clients’ Registered Education Savings Plan account in accordance with the clients’ instructions.
  1. By acting accepting cash from the clients, the Respondent contravened the Member’s policies and procedures, contrary to MFDA Rules 1.1.2, 2.5.1 and 2.1.1.

Failing to Maintain Notes and Records

  1. At all material times, Investors Group’s policies and procedures required its Approved Persons, including the Respondent, to maintain documentation of all contact with clients, including specific instructions given by a client in respect of a transaction.
  1. At all material times, client JW was a client of Investors Group whose account was serviced by the Respondent.
  1. Between February 2015 and December 2015, the Respondent processed 11 transactions requested by client JW, without maintaining documentation of the transactions, including any details of client JW’s instructions.
  1. By failing to maintain documentation of the 11 transactions, the Respondent contravened the Member’s policies and procedures and failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rules 1.1.2, 2.5.1 and 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: Sarah Glickman
Fax:  416-361-9073
Email: sglickman@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.