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MFDA Notice of Hearing

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HomeCompleted Hearings201728 - Walter John Dixon › NOH201728

201728

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

Walter John Dixon

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Central Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) in the hearing room at the MFDA offices located at 121 King Street West, Suite 1000, Toronto, Ontario on September 12, 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 Walter John Dixon (“Respondent”).

DATED: Jul 25, 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: Commencing November 6, 2015, the Respondent has failed to cooperate with the MFDA’s investigation into his conduct, contrary to section 22.1 of MFDA By-law No. 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. The Respondent became registered in the mutual fund industry in January 1990.
  2. From February 16, 2004 to June 1, 2011, the Respondent was registered in Ontario and British Columbia as a mutual fund salesperson (now known as a dealing representative) with Partners In Planning Financial Services Ltd. (“PIP”), a former Member of the MFDA. During this time, the Respondent was also designated as a Branch Manager with PIP.
  3. Effective June 1, 2011, PIP amalgamated with IPC Investment Corp. (“IPC”), a Member of the MFDA and thereafter continued to operate as IPC.
  4. From June 1, 2011 to May 17, 2015, the Respondent was registered in Ontario and British Columbia as a mutual fund salesperson with IPC.
  5. At all material times, the Respondent conducted business in the Lion’s Head, Ontario area.
  6. At all material times, the Respondent conducted business through a corporation, Up Your Assets Inc., which operated as WealthCare Financial Group. The Respondent and his wife were the sole shareholders and directors of Up Your Assets Inc.
  7. The Respondent is not currently registered in the securities industry in any capacity.

Allegation #1 – The Respondent Failed to Cooperate with the MFDA’s Investigation

  1. On or about January 13, 2015, Staff of the MFDA (“Staff”) commenced a review of the Respondent as a result of a complaint it received from a client of IPC concerning his activities as a mutual salesperson (the “Complaint”).
  2. The Complaint alleged that the Respondent charged excessive service fees to clients through Up Your Assets Inc. and did not inform the clients that, in addition to the service fees he charged them, he earned commissions and fees in respect of mutual fund trades in the clients’ accounts.
  3. For Staff, the Complaint also raised concerns that the Respondent contravened MFDA Rule 2.1.4 by soliciting and accepting remuneration from clients for mutual fund business which was payable to the Member only.
  4. On May 21, 2015, Staff sent a letter to the Respondent informing him that it had completed its initial review of this matter and escalated it to the MFDA Investigations group.
  5. On November 6, 2015, Staff sent a letter to the Respondent, by regular mail and registered mail, advising that he was required to attend an interview with Staff regarding the Complaint. Staff requested that the Respondent contact them no later than November 16, 2015 to schedule an interview.
  6. The Respondent did not contact Staff by November 16, 2015 as requested.
  7. Between December 2, 2015 and April 21, 2016, Staff made numerous attempts to secure the Respondent’s attendance and participation at an interview in order to obtain a statement concerning the Complaint and his activities as a mutual fund salesperson. These attempts included letters delivered by regular mail, registered mail and process servers, as well as communications by email and telephone.
  8. Staff informed the Respondent that he could be the subject of a disciplinary proceeding pursuant to section 22.1 of MFDA By-law No. 1 if he failed to attend an interview as requested.
  9. The Respondent periodically communicated with Staff until March 22, 2016, but failed to attend at an interview with Staff.
  10. The Respondent’s failure to attend at an interview has frustrated MFDA Staff’s ability to determine the full nature and extent of the Respondent’s conduct.
  11. By failing to attend an interview as requested by the MFDA, the Respondent engaged in conduct contrary to section 22.1 of MFDA By-law No. 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 Respondents 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: Francis Roy
Fax: (416) 361-9073
Email: froy@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.