MFDA Notice of Hearing

543373 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 October 1996 to November 2016, the Respondent was registered as a mutual fund salesperson (now known as a dealing representative) in Alberta with Investors Group Financial Services Inc. (“Investors Group”), a Member of the MFDA. The Respondent was also registered as a dealing representative in Ontario and British Columbia.

2. At all material times, the Respondent conducted business in the Calgary, Alberta area.

3. As of November 1, 2016, the Respondent retired from Investors Group and is not currently registered in the securities industry in any capacity.

Allegation #1 – Pre-Signed Account Forms

4. At all material times, Investors Group’s policies and procedures prohibited its representatives, including the Respondent, from obtaining, holding, or using pre-signed account forms.

5. Between April 2011 and July 2015, the Respondent obtained, possessed, and used to process transactions, 189 pre-signed account forms in respect of 26 clients.

6. The pre-signed account forms consisted of transfer authorization forms used to complete the transfer of monies from the accounts of clients held at Investors Group Securities Inc., an investment dealer, to the clients’ accounts at Investors Group.

7. The Respondent obtained a signed transfer authorization form from the clients with all information completed except for the date, and then photocopied the form containing the clients’ signatures for use in completing separate transfer authorizations with the applicable date inserted on the photocopied form.

8. The Respondent then submitted the pre-signed copied forms to Investors Group for processing.

9. 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.

Allegation #2 – Failure to Maintain Evidence of Client Instructions

10. At all material times, Investors Group’s policies and procedures required its representatives, including the Respondent, to maintain a record of all client instructions.

11. During a branch audit conducted in January 2011, Investors Group identified that the Respondent failed to keep adequate records documenting client trade instructions. In April 2011, Investors Group reminded the Respondent of the importance of maintaining records of client instructions. During a branch audit conducted in March 2015, Investors Group again identified that the Respondent failed to keep adequate records documenting client trade instructions.

12. During Investors Group’s investigation into the possession and use of pre-signed account forms as described in paragraphs 4 – 8, above, Investors Group identified that on July 14, 2015 and July 16, 2015, the Respondent processed 2 trades in the accounts of 2 clients, but failed to maintain a record of client instructions.

13. By virtue of the foregoing, the Respondent failed to comply with Investors Group’s policies and procedures, and engaged in conduct 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
• are 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
Prairie Regional Office
Suite 850, 800 – 6th Ave SW
Calgary, AB T2P 3G3
Attention: Justin Dunphy
Fax: 403-266-8858
Email: jdunphy@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.