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MFDA Notice of Hearing

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HomeCompleted Hearings201895 - Quan Matthew Anh Nguyen › NOH201895

201895

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

Quan Matthew Anh Nguyen

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 December 11, 2018 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 Quan Matthew Anh Nguyen (“Respondent”).

DATED: Oct 1, 2018

"Paige Ward"

Paige Ward

Corporate Secretary

Mutual Fund Dealers Association of Canada
121 King St. West, Suite 1000
Toronto, ON M5H 3T9
Telephone: 416-943-5838
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 in or about September 2017, the Respondent failed to cooperate with an investigation by MFDA Staff into the Respondent’s conduct, contrary to section 22.1 of MFDA By-Law No. 1.

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 May 2009 to June 10, 2013, the Respondent was registered in Ontario as a mutual fund salesperson (now known as a dealing representative) with Investors Group Financial Services Inc., a Member of the MFDA.
  1. From December 9, 2013 to May 12, 2017, the Respondent was registered in Ontario as a mutual fund salesperson with Carte Wealth Management Inc. (“CWM”), a Member of the MFDA.
  1. On May 12, 2017, the Respondent resigned from CWM and is no longer registered in the securities industry in any capacity.
  1. At all material times, the Respondent carried on business in Mississauga, Ontario.

Allegation #1 – Failure to Cooperate

Background
  1. B2B Bank is a financial institution that, among other things, provides investment loans to individuals. While registered with CWM, the Respondent processed certain loans on behalf of clients through B2B Bank.
  1. On April 4, 2017, B2B Bank advised CWM that it was terminating its relationship with the Respondent because: (1) certain loans processed by the Respondent for clients were delinquent; (2) clients redeemed RRSP assets securing the loans shortly after the loans were obtained; and (3) there was some indication of fraud with 2 of 5 loans applications submitted on behalf of clients.
  1. In response to information CWM received from B2B Bank, it commenced an investigation and suspended the Respondent.
  1. On April 11, 2017, CWM interviewed the Respondent who denied any wrongdoing. The Respondent initially committed to cooperating with CWM’s investigation, but shortly thereafter stopped responding to emails from the Member.
  1. On May 12, 2017, the Respondent submitted his resignation to CWM.
Failure to attend for an interview requested by Staff
  1. Staff of the MFDA (“Staff”) reviewed 7 loan applications processed by the Respondent for mutual fund clients through B2B Bank and another financial institution. Each of the 7 loan applications reviewed by Staff contained information or documentation that was suspicious or false.
  1. On May 18, 2017, Staff sent the Respondent a letter by registered mail to his last known address as recorded in the MFDA’s records (the “last known address”). The letter advised the Respondent of Staff’s investigation and requested further information concerning the Respondent’s RSP loan practice. The Respondent signed for the letter and acknowledged delivery on May 23, 2017.
  1. The Respondent replied to Staff’s letter on May 23, 2017 by email, and provided some answers to Staff’s request for information.
  1. On September 21, 2017, Staff sent the Respondent a letter by registered mail to his last known address, requesting that he attend an interview pursuant to section 22.1 of MFDA By-Law No. 1. The Respondent’s father signed for the letter on September 26, 2017.
  1. The Respondent did not respond to Staff’s request for an interview.
  1. On October 10, 2017, Staff sent the Respondent a second letter to his last known address by process server. In the letter, Staff advised the Respondent he was required to attend an interview scheduled for November 10, 2017 and to confirm his attendance by e-mail prior to October 24, 2017. Staff further advised the Respondent of his obligations pursuant to section 22.1 of MFDA By-Law No. 1. The letter was hand delivered at the Respondent’s last known address to his father.
  1. The Respondent did not respond to Staff’s second letter or attend at the interview scheduled for November 10, 2017.
  1. As a result of the Respondent’s failure to cooperate, Staff cannot determine the full nature and extent of the Respondent’s conduct described above, including whether and to what extent the Respondent participated in the potentially fraudulent loan applications.
  1. By failing to respond to Staff’s letter and attend an interview requested by Staff, the Respondent has failed to cooperate with Staff 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; and
  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: Alan Melamud
Email: amelamud@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) 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.