SETTLEMENT AGREEMENT

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Settlement Agreement
File No. 201130


IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Anu Bala Jain



SETTLEMENT AGREEMENT

I.
INTRODUCTION

1.
By Notice of Settlement Hearing, the Mutual Fund Dealers Association of Canada (the
“MFDA”) will announce that it proposes to hold a hearing to consider whether, pursuant to
section 24.4 of By-law No. 1, a hearing panel of the Central Regional Council (the “Hearing
Panel”) of the MFDA should accept the settlement agreement (the “Settlement Agreement”)
entered into between Staff of the MFDA (“Staff”) and Anu Bala Jain (the “Respondent”).

II.
JOINT SETTLEMENT RECOMMENDATION

2.
Staff conducted an investigation of the Respondent’s activities. The investigation
disclosed that the Respondent had engaged in activity for which the Respondent could be
penalized on the exercise of the discretion of the Hearing Panel pursuant to s. 24.1 of
MFDA By-law No. 1.

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3.
Staff and the Respondent recommend settlement of the matters disclosed by the
investigation in accordance with the terms and conditions set out below. The Respondent agrees
to the settlement on the basis of the facts set out in Parts IV and V herein and consents to the
making of an Order in the form attached as Schedule “A”.

4.
Staff and the Respondent agree that the terms of this Settlement Agreement, including the
attached Schedule “A”, will be released to the public only if and when the Settlement Agreement
is accepted by the Hearing Panel.

III.
ACKNOWLEDGEMENT

5.
Staff and the Respondent agree with the facts set out in Part IV herein for the purposes of
this Settlement Agreement only and further agree that this agreement of facts is without
prejudice to the Respondent or Staff in any other proceeding of any kind including, but without
limiting the generality of the foregoing, any proceedings brought by the MFDA (subject to Part
X) or any civil or other proceedings which may be brought by any other person or agency,
whether or not this Settlement Agreement is accepted by the Hearing Panel.

IV.
AGREED FACTS

Registration History

6.
From March 31, 2004 to January 18, 2010, the Respondent was registered in Ontario as a
mutual fund salesperson with Global Maxfin Investments Inc. (“Global Maxfin”). While at
Global Maxfin, she was also registered as a branch manager from October 12, 2007 to January
18, 2010.

7.
Prior to working at Global Maxfin, the Respondent was registered with PFSL
Investments Canada Ltd (“PFSL”) from May 28, 2003 to July 3, 2003.

8.
Since March 15, 2010, the Respondent has been registered in Ontario as a mutual fund
salesperson and branch manager with Queen Financial Group Inc. (“Queen Financial”). On May
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24, 2011, following discussions with MFDA Staff concerning the events described herein, Queen
Financial suspended the Respondent’s responsibilities as a branch manager pending the outcome
of this proceeding.

9.
The Respondent states that notwithstanding the fact that she was registered on the dates
and in the registration categories set out above, her industry experience was quite limited prior to
November 2006 when she began working as a mutual fund salesperson on a full time basis (with
Global Maxfin) for the first time. Prior to November 2006, the Respondent’s securities industry
experience was limited to work primarily as a scholarship salesperson on a part-time basis.
During 2006, while registered with Global Maxfin, she was also briefly employed by Toronto
Hydro.

10.
The Respondent has no previous disciplinary history and has not been the subject of
complaints or internal discipline by Global Maxfin, PFSL or Queen Financial except as
described herein with respect to the matters described in this Settlement Agreement.

11.
Global Maxfin is registered as a mutual fund dealer and an exempt market dealer in
British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia and Newfoundland
and Labrador. Global Maxfin is also registered as a mutual fund dealer in the Northwest
Territories and Nunavut and as a scholarship plan dealer in British Columbia, Alberta, New
Brunswick, Nova Scotia and Newfoundland and Labrador. Global Maxfin became a Member of
the MFDA on June 7, 2002.

12.
Queen Financial is registered as a mutual fund dealer and an exempt market dealer in
Ontario and as a mutual fund dealer in British Columbia. Queen Financial became a Member of
the MFDA on October 3, 2006.

Facilitating Stealth Advising

13.
In September 2007, the Respondent worked from a branch office of Global Maxfin in
Mississauga, Ontario with three other Approved Persons. The Respondent was the branch
manager of the location.
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14.
During the summer of 2007, the Respondent met an individual named MRM at a Global
Maxfin event. In 2007, MRM was licensed to sell insurance products through a managing
general agency affiliated with Global Maxfin, but he was not registered to sell securities,
including mutual funds.

15.
In September 2007, MRM told the Respondent that he had some insurance clients who
wanted to purchase mutual funds. MRM asked the Respondent to provide him with the
necessary documentation to open accounts for the individuals at Global Maxfin and to process
trades in those accounts. MRM also requested that the Respondent facilitate this activity by
processing all of the documentation under her Global Maxfin representative code. In exchange
for doing so, the Respondent would be entitled to retain 40% of the sales commissions generated
from trading activity in the individuals’ accounts, and would remit the remaining 60% to MRM.
The Respondent agreed to participate in this arrangement (the “Stealth Advising Arrangement”).

16.
In accordance with Stealth Advising Arrangement, between September 2007 and
February 2008, MRM met with 18 individuals in the absence of the Respondent to complete the
account opening and trade processing documentation. MRM provided the completed
documentation to the Respondent, who signed it and submitted it to the Member for processing
using her representative code.

17.
In a number of cases, MRM recommended that clients borrow money to invest in mutual
funds, thereby implementing a leveraging strategy for the clients.

18.
By failing to meet with these individuals prior to opening accounts and processing trades
for them, the Respondent failed to fulfill her obligation to:

(a) learn the essential facts relative to each client and each order or account accepted;
(b) ensure that the acceptance of each order was within the bounds of good business
practice;
(c) ensure that each order accepted or recommendation made for each account was
suitable for the client and in keeping with the client’s investment objectives;
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(d) explain to the individuals the features and risks of using borrowed monies to
invest (leveraging);
(e) ensure the leveraging strategy was appropriate for the clients; and
(f) ensure that the additional risk disclosure documentation required by MFDA Rule
2.6 was provided to the clients, explained to them and signed by them.

19.
Between September 14, 2007 and March 17, 2008, the Respondent sent 10 cheques to
MRM in payment of his share of the sales commissions earned on the trading activity in the
individuals’ accounts, in accordance with the terms of Stealth Advising Arrangement. The total
amount sent to MRM was $21,825.

20.
Based on the 60%-40% commission split called for under the terms of the Stealth
Advising Arrangement, the Respondent retained approximately $14,550 in sales commissions
from the trading activity in the accounts of the 18 clients.

21.
MRM was not registered as a mutual fund salesperson and did not possess the necessary
proficiencies to advise or trade in securities on behalf of the 18 individuals.

22.
There is no evidence that Global Maxfin was aware of the Stealth Advising Arrangement.
As a consequence, at all material times, MRM was not subject to the policies and procedures of,
or supervision by, Global Maxfin.

23.
By participating in the Stealth Advising Arrangement, the Respondent facilitated the
processing of securities related business by MRM, an unregistered individual, through the
accounts and facilities of Global Maxfin. MRM was not in an employer-employee relationship,
a principal-agent relationship or an introducing dealer-carrying dealer relationship with Global
Maxfin, as required by MFDA Rule 1.1.1(c).

24.
During the period that the Stealth Advising Arrangement was in place, the Respondent
was the designated branch manager. In her capacity as the branch manager, the Respondent
failed to ensure that business conducted on behalf of the Member was in compliance with
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applicable securities legislation and the By-laws and Rules of the MFDA, contrary to MFDA
Rule 2.5.3(b)(i).1

25.
On February 21, 2008, after completing the proficiency requirements necessary to
become a registrant, MRM was registered in Ontario as a mutual fund salesperson with Global
Maxfin. As a result, the Stealth Advising Arrangement came to an end.

26.
On November 5, 2009, MRM was terminated in good standing by Global Maxfin (which
at that time was unaware of the Stealth Advising Arrangement).

The Complaint of MA

27.
On March 15, 2010, the Respondent transferred her registration to Queen Financial.

28.
In April 2010, client MA contacted the Ontario Securities Commission (the “OSC”) and
the MFDA when he learned that MRM had not been registered as a mutual fund salesperson
when he advised client MA and his brother SA to implement a leveraging strategy to purchase
mutual funds for their account at Global Maxfin. Client MA noted that the Respondent’s name
appeared on his Global Maxfin account statements as the Approved Person responsible for his
account but that he had never met her.

The Global Maxfin Investigation

29.
In accordance with its complaint handling obligations pursuant to MFDA Rule 2.11 and
MFDA Policy No. 3, Global Maxfin commenced an investigation after receiving a copy of client
MA’s complaint from the MFDA.

30.
At the time client MA’s complaint was received in April 2010, the Respondent was no
longer an Approved Person with Global Maxfin (she had transferred to Queen Financial on
March 15, 2010). Global Maxfin therefore contacted the Respondent at Queen Financial to

1 As of January 21, 2011, amendments to the MFDA Rules were implemented which resulted, among other things,
in the renumbering of former MFDA Rule 2.5.3(b)(i) to current MFDA Rule 2.5.5(d)(i).
Page 6 of 20

inform her of the complaint and scheduled a meeting with her on May 26, 2010 at Global
Maxfin’s office.

31.
On May 26, 2010, the Respondent attended the meeting at Global Maxfin’s office and
denied the allegations in client MA’s complaint. During an hour of questioning by Global
Maxfin’s compliance staff, the Respondent insisted that she had met with clients MA and SA at
her office on three occasions and she produced copies of handwritten notes from her client file
and claimed that the notes recorded what had occurred during meetings with clients MA and SA
on October 3, 16 and 17, 2007 (the “Notes”).

32.
On the basis of the information and documentation provided by the Respondent,
including the Notes, Global Maxfin sent a letter to client MA dated June 16, 2010 denying the
allegations in client MA’s complaint.

33.
On June 22, 2010, client MA reasserted to Global Maxfin that he and his brother SA had
never met the Respondent and had never attended a meeting at her office. He informed Global
Maxfin that:

i) all correspondence about investment decisions was exchanged exclusively with
MRM by e-mail;
ii) all meetings occurred with MRM at his home (and the Respondent was not
present at any of the meetings); and
iii) blank client account forms had been presented to him by MRM to be signed.

34.
Client MA also provided Global Maxfin with copies of several e-mails from MRM that
were received by client MA between September 29, 2007 and October 18, 2007 concerning the
implementation of the leveraging strategy that MRM had recommended to client MA. The
Respondent was not referenced in or copied on any of the correspondence

35.
On the basis of the additional information provided by client MA, Global Maxfin
reopened its investigation of client MA’s complaint. Global Maxfin contacted additional clients
of the Respondent. Three clients informed Global Maxfin that MRM had implemented
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leveraging strategies for them prior to his registration as an Approved Person and indicated that
they had met with MRM and not the Respondent when they opened their accounts and
implemented the leveraging strategies that MRM recommended.

36.
Most of the clients whose accounts had been the subject of the Stealth Advising
Arrangement did not respond to Global Maxfin’s inquiries about whether they dealt with the
Respondent or MRM when opening accounts and receiving investment advice.

37.
By letter dated July 27, 2010, Global Maxfin informed client MA that Global Maxfin had
concluded that client MA and his brother, client SA had been provided with investment advice
by MRM before he became an Approved Person.

The Queen Financial Investigation

38.
On May 26, 2010, MFDA Staff informed Queen Financial that the Respondent may have
facilitated stealth advising by an unregistered individual.

39.
When compliance staff from Queen Financial questioned the Respondent about the
MFDA Staff’s concerns, she falsely denied that she had participated in a stealth advising
arrangement.

The MFDA Investigation

40.
On May 26, 2010, MFDA Enforcement Staff sent a request to the Respondent for a
response to the allegations in client MA’s complaint. At the outset of MFDA Staff’s
investigation, Global Maxfin provided MFDA Staff with copies of the Notes that the Respondent
had provided to Global Maxfin.

41.
On June 1, 2010, the Respondent sent a three page response to the MFDA in which she
described client MA’s allegations as “completely baseless, shocking to me and an attempt to
tarnish my image”. The Respondent further stated in her letter that she had met with client MA
in her office three times to provide him with investment advice and to implement a leveraging
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strategy in his account. The Respondent also denied that she had ever had a business or
commission splitting arrangement with MRM when MRM was not registered. All of the
Respondent’s assertions were false.

42.
During the course of the MFDA’s investigation, MFDA Staff learned that in November
2010, the Respondent met with client SA and questioned him as to why client MA was
proceeding with his complaint. Client SA informed the Respondent that client MA had no
intention of withdrawing his complaint.

43.
In response to follow-up inquiries by Global Maxfin, the original three clients who had
earlier acknowledged that they had dealt with MRM recanted their statements and denied that
they had ever met with an advisor other than the Respondent.

44.
On April 14, 2011, at the request of MFDA Staff, the Respondent attended an interview
to provide information relevant to the investigation. In response to questioning by MFDA Staff,
the Respondent admitted, among other things, that:

i) she had entered into the Stealth Advising Arrangement;
ii) she has never met client MA;
iii) she had never met client MA or SA prior to the time she allowed account opening
documents and trading in their accounts to be processed under her representative
code in October 2007;
iv) she provided false information to the compliance staff at Global Maxfin and
Queen Financial in response to their questions about her conduct;
v) she prepared the Notes that she had produced to Global Maxfin describing three
meetings between her and clients MA and SA in October 2007, however, the
meetings described in the Notes had not in fact occurred; and
vi) the June 1, 2010 written response that she submitted to the MFDA in response to
the complaint of MA falsely asserted that she had met with MA and SA in
October 2007 and denied MA’s allegation that he had never met her.

Page 9 of 20

45.
Following the interview with MFDA Staff, in response to an undertaking requested by
MFDA Staff during the interview, the Respondent provided Staff with a list of clients for whom
she had allowed accounts to be opened and trades to be processed under her representative code
under the terms of the Stealth Advising Arrangement. The Respondent also provided copies of
cheques that she had sent to MRM in accordance with the Stealth Advising Arrangement.

46.
By providing false and misleading information, and omitting to provide other relevant
information, to MFDA Staff and to compliance staff at Global Maxfin and Queen Financial, and
by creating the Notes of three meetings with clients MA and SA that never actually occurred and
providing the Notes to Global Maxfin, the Respondent attempted to frustrate the MFDA’s
investigation and to interfere with the Members’ handling of client MA’s complaint, contrary to
MFDA Rule 2.1.1 and s. 22. 1 of MFDA By-law No. 1.

47.
Since April 14, 2011 when the Respondent attended an interview with MFDA Staff (as
referenced in paragraph 44 above), the Respondent has admitted to her misconduct, expressed
remorse and cooperated fully with Staff’s investigation of her conduct.

48.
The Respondent granted Staff access to notices of assessment from the Canada Revenue
Agency showing records of her income for the years 2007-2010 and Staff is satisfied that the fine
agreed to under the terms of settlement in Part VI below constitutes a substantial proportion of
the Respondent’s annual income.

V.
THE RESPONDENT’S REPRESENTATIONS

49.
The Respondent states that in May 2010, MRM contacted her after MA’s complaints
were submitted to the OSC and the MFDA and:

i) told her that if she admitted to the conduct alleged by MA, she would lose her
license;
ii) counseled her to prepare the Notes to persuade compliance staff and investigators
that she had met with MA and SA in October 2007; and
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iii) drafted substantial portions of the written response to the MFDA that she
submitted on June 1, 2010 in an attempt to discredit MA and deny his allegations.

50.
The Respondent states that:

i) she panicked when she learned about MA’s complaint;
ii) her anxiety was increased as a result of MRM’s warning to her in May 2010 that
MA’s complaint would likely result in the loss of her career and livelihood;
iii) she impulsively accepted MRM’s advice to falsely deny the allegations in MA’s
complaint and to create the Notes to corroborate her falsely stated position;
iv) in retrospect, she deeply regrets the way in which she responded to the complaint.

VI.
CONTRAVENTIONS

51.
The Respondent admits that between September 2007 and February 2008, she allowed
MRM, an unregistered individual, to:

i) open new accounts at the Member for 18 individuals with whom the Respondent
never met;
ii) recommend and implement leveraging strategies for these clients; and
iii) recommend and process trades in the accounts of these clients using the
Respondent’s representative code;
thereby:
a) facilitating stealth advising by MRM, contrary to MFDA Rules 1.1.1(c) and 2.1.1;
b) failing to ensure that she (the Respondent) performed the necessary due diligence
to learn the essential facts relative to the clients and failing to ensure that the
investments and the leveraging strategies were suitable and appropriate for the
clients, contrary to MFDA Rules 2.2.1 and 2.1.1; and
c) failing in her (the Respondent’s) capacity as a branch manger to ensure that
business conducted at the branch was in compliance with MFDA By-laws, Rules
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and applicable legislation, contrary to MFDA Rules 2.5.3(b)(i)2 and 2.1.1.

52.
The Respondent admits that between May 26, 2010 and April 14, 2011, in response to a
complaint by client MA, in respect of whom the Respondent was identified as the Approved
Person responsible for servicing client MA’s accounts, the Respondent made false and
misleading statements and omitted to provide other relevant information during the course of
investigations by two Members and by MFDA Staff:

(a) in a written statement to MFDA Staff, dated June 3, 2010;
(b) in oral statements to compliance staff at two Members; and
(c) by preparing notes of three meetings with client MA in October 2007 which had
not in fact occurred;
contrary to MFDA Rule 2.1.1 and s. 22.1 of MFDA By-law No. 1.

VII.
TERMS OF SETTLEMENT

53.
The Respondent agrees to the following terms of settlement:

(a) the authority of the Respondent to conduct securities related business while in the employ
of, or associated with, any Member of the MFDA shall be suspended for a period of 1
year from the date that this Settlement Agreement is accepted by a Hearing Panel;
(b) the Respondent shall be permanently prohibited from being registered or acting as a
Branch Manager, Compliance Officer or in any other supervisory capacity for a Member
of the MFDA;
(c) the Respondent shall pay a fine in the amount of $20,000;
(d) the Respondent shall pay the costs of this proceeding in the amount of $2,500;
(e) the fine and the costs shall be payable in accordance with the following terms:
i. $7,500 of the fine and $2,500 in costs shall be payable immediately upon
acceptance of the Settlement Agreement; and
ii. the remaining $12,500 of the fine shall be paid in 5 installments of $2,500 payable
by cheques post-dated to the following dates: April 1, 2012, June 1, 2012,

2On January 21, 2011, amendments to the numbering and wording of certain MFDA Rules came into effect as a
consequence of which, former MFDA Rule 2.5.3 is now amended and incorporated into Rule 2.5.5.
Page 12 of 20

August 1, 2012, October 1, 2012 and December 1, 2012;
(f) The Respondent agrees that if she fails to pay all or part of the fine installments on the
dates when the installments are due in accordance with sub-paragraph 53(e) above, then
automatically and without further notice, and without Staff having to again appear before
a Hearing Panel or commence any further proceeding, the Respondent’s suspension from
conducting securities related business while in the employ of, or associated with, any
Member of the MFDA shall be extended by the total number of days that any installment
payments remained in arrears;
(g) Prior to conducting securities related business while in the employ of or associated with a
Member of the MFDA following the one year suspension set out in sub-paragraph 53(a)
above, the Respondent shall write or rewrite and pass the Conduct and Practices
Handbook course offered by the Canadian Securities Institute or another course approved
by the MFDA that includes content concerning business ethics and procedure;
(h) In accordance with s. 24.4.2(b), the Respondent agrees that if she conducts securities
related business while in the employ or associated with a Member of the MFDA in the
future, she will comply with all MFDA By-laws, Rules and Policies, and all applicable
securities legislation and regulations made thereunder and she will not facilitate trading
by unregistered individuals or submit false or misleading information or documents to
any securities regulator including a securities commission or the MFDA or to any
Member of the MFDA or employees or agents of a Member.
(i) the Respondent will attend in person, on the date set for the Settlement Hearing.

VIII. STAFF COMMITMENT

54.
If this Settlement Agreement is accepted by the Hearing Panel, Staff will not initiate any
proceeding under the By-laws of the MFDA against the Respondent in respect of the facts set out
in Part IV and the contraventions described in Part VI of this Settlement Agreement, subject to
the provisions of Part X below. Nothing in this Settlement Agreement precludes Staff from
investigating or initiating proceedings in respect of any contraventions that are not set out in Part
VI of this Settlement Agreement or in respect of conduct that occurred outside the specified date
ranges of the facts and contraventions set out in Parts IV and VI, whether known or unknown at
the time of settlement. Furthermore, nothing in this Settlement Agreement shall relieve the
Respondent from fulfilling any continuing regulatory obligations.
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IX.
PROCEDURE FOR APPROVAL OF SETTLEMENT

55.
Acceptance of this Settlement Agreement shall be sought at a hearing of the Central
Regional Council of the MFDA on a date agreed to by counsel for Staff and the Respondent.

56.
Staff and the Respondent may refer to any part, or all, of the Settlement Agreement at the
settlement hearing. Staff and the Respondent also agree that if this Settlement Agreement is
accepted by the Hearing Panel, it will constitute the entirety of the evidence to be submitted
respecting the Respondent in this matter, and the Respondent agrees to waive her rights to a full
hearing, a review hearing before the Board of Directors of the MFDA or any securities
commission with jurisdiction in the matter under its enabling legislation, or a judicial review or
appeal of the matter before any court of competent jurisdiction.

57.
Staff and the Respondent agree that if this Settlement Agreement is accepted by the
Hearing Panel, then the Respondent shall be deemed to have been penalized by the Hearing
Panel pursuant to s. 24.1.2 of By-law No. 1 for the purpose of giving notice to the public thereof
in accordance with s. 24.5 of By-law No. 1.

58.
Staff and the Respondent agree that if this Settlement Agreement is accepted by the
Hearing Panel, neither Staff nor the Respondent will make any public statement inconsistent with
this Settlement Agreement. Nothing in this section is intended to restrict the Respondent from
making full answer and defence to any civil or other proceedings against her.

X.
FAILURE TO HONOUR SETTLEMENT AGREEMENT

59.
If this Settlement Agreement is accepted by the Hearing Panel and, at any subsequent
time, the Respondent fails to honour any of the Terms of Settlement set out herein, Staff reserves
the right to bring proceedings under section 24.3 of the By-laws of the MFDA against the
Respondent based on, but not limited to, the facts set out in Part IV of the Settlement Agreement,
as well as the breach of the Settlement Agreement. If such additional enforcement action is
taken, the Respondent agrees that the proceeding(s) may be heard and determined by a hearing
panel comprised of all or some of the same members of the hearing panel that accepted the
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Settlement Agreement, if available.

XI.
NON-ACCEPTANCE OF SETTLEMENT AGREEMENT

60.
If, for any reason whatsoever, this Settlement Agreement is not accepted by the Hearing
Panel or an Order in the form attached as Schedule “A” is not made by the Hearing Panel, each
of Staff and the Respondent will be entitled to any available proceedings, remedies and
challenges, including proceeding to a disciplinary hearing pursuant to sections 20 and 24 of By-
law No. 1, unaffected by this Settlement Agreement or the settlement negotiations.

61.
Whether or not this Settlement Agreement is accepted by the Hearing Panel, the
Respondent agrees that she will not, in any proceeding, refer to or rely upon this Settlement
Agreement or the negotiation or process of approval of this Settlement Agreement as the basis
for any allegation against the MFDA of lack of jurisdiction, bias, appearance of bias, unfairness,
or any other remedy or challenge that may otherwise be available.

XII.
DISCLOSURE OF AGREEMENT

62.
The terms of this Settlement Agreement will be treated as confidential by the parties
hereto until accepted by the Hearing Panel, and forever if, for any reason whatsoever, this
Settlement Agreement is not accepted by the Hearing Panel, except with the written consent of
both the Respondent and Staff or as may be required by law.

63.
Any obligations of confidentiality shall terminate upon acceptance of this Settlement
Agreement by the Hearing Panel.

XIII. EXECUTION OF SETTLEMENT AGREEMENT

64.
This Settlement Agreement may be signed in one or more counterparts which together
shall constitute a binding agreement.

65.
A facsimile copy of any signature shall be effective as an original signature.

Page 15 of 20

Dated: February 15, 2012.

“Dorothy Hagel”
“Anu
Bala
Jain”
Witness- Signature
Anu Bala Jain

Dorothy Hagel

Witness – Print Name

“Mark
Gordon”

Staff of the MFDA
Per:
Mark
Gordon
Executive
Vice-President
Page 16 of 20


Schedule “A”
Order
File No. 201130

IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Anu Bala Jain



ORDER

WHEREAS on [date], the Mutual Fund Dealers Association of Canada (the “MFDA”)
issued a Notice of Settlement Hearing pursuant to section 24.4 of By-law No. 1 in respect of Anu
Bala Jain (the “Respondent”);
AND WHEREAS the Respondent entered into a settlement agreement with Staff of the
MFDA, dated [date] (the “Settlement Agreement”), in which the Respondent agreed to a
proposed settlement of matters for which the Respondent could be disciplined pursuant to ss. 20
and 24.1 of By-law No. 1;
AND WHEREAS on the basis of the facts set out in Parts IV and V of the Settlement
Agreement and the contraventions admitted by the Respondent in Part VI of the Settlement
Agreement, the Hearing Panel is of the opinion that:
(a) between September 2007 and February 2008, she allowed MRM, an unregistered
individual, to:

Page 17 of 20


(i) open new accounts at the Member for 18 individuals with whom the Respondent
never met;
(ii) recommend and implement leveraging strategies for these clients; and
(iii)recommend and process trades in the accounts of these clients using the Respondent’s
representative code;
thereby:
(A) facilitating stealth advising by MRM, contrary to MFDA Rules 1.1.1(c) and 2.1.1;
(B) failing to ensure that she (the Respondent) performed the necessary due diligence to
learn the essential facts relative to the clients and failing to ensure that the
investments and the leveraging strategies were suitable and appropriate for the clients,
contrary to MFDA Rules 2.2.1 and 2.1.1; and
(C) failing in her (the Respondent’s) capacity as a branch manger to ensure that business
conducted at the branch was in compliance with MFDA By-laws, Rules and
applicable legislation, contrary to MFDA Rules 2.5.3(b)(i)3 and 2.1.1.
(b) Between May 26, 2010 and April 14, 2011, in response to a complaint by client MA, in
respect of whom the Respondent was identified as the Approved Person responsible for
servicing client MA’s accounts, the Respondent made false and misleading statements
and omitted to provide other relevant information during the course of investigations by
two Members and by MFDA Staff:
(i) in a written statement to MFDA Staff, dated June 3, 2010;
(ii) in oral statements to compliance staff at two Members; and
(iii)by preparing notes of three meetings with client MA in October 2007 which had
not in fact occurred;
contrary to MFDA Rule 2.1.1 and s. 22.1 of MFDA By-law No. 1.
IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of
which:

3 On January 21, 2011, amendments to the numbering and wording of certain MFDA Rules came into effect as a
consequence of which, former MFDA Rule 2.5.3 is now amended and incorporated into Rule 2.5.5.

Page 18 of 20


1. The authority of the Respondent to conduct securities related business while in the employ
of, or associated with, any Member of the MFDA shall be suspended for a period of 1 year
from the date of this Order, pursuant to s. 24.1.1(c) of MFDA By-law No. 1.
2. The Respondent shall be permanently prohibited from being registered or acting as a Branch
Manager or in any supervisory capacity for a Member of the MFDA, pursuant to s. 24.1.1(f)
of MFDA By-law No. 1;
3. The Respondent shall pay a fine in the amount of $20,000, pursuant to s. 24.1.1(b) of MFDA
By-law No. 1;
4. The Respondent shall pay the costs of this proceeding in the amount of $2,500, pursuant to s.
24.2 of MFDA By-law No. 1;
5. The fine and the costs referenced in this Order shall be payable in accordance with the
following terms:
(a) $7,500 of the fine and $2,500 in costs shall be payable immediately; and
(b) the remaining $12,500 of the fine shall be paid in 5 installments of $2,500 payable by
cheques post-dated to the following dates: April 1, 2012, June 1, 2012, August 1, 2012,
October 1, 2012 and December 1, 2012.
6. If the Respondent fails to pay all or part of the fine installments on the dates when the
installments are due in accordance with section 5 above (including if any post-dated cheques
provided to pay those amounts are not honoured by a bank), then automatically and without
further notice, and without Staff having to again appear before a Hearing Panel or commence
any further proceeding, the Respondent’s suspension from conducting securities related
business while in the employ of, or associated with, any Member of the MFDA (as
referenced in section 1 above) shall be extended by the total number of days that any
installment payments remain or remained in arrears.
7. Prior to conducting securities related business while in the employ of or associated with a
Member of the MFDA following the one year suspension described in section 1 above (and
any additional period of suspension that is applicable pursuant to section 6 above), the
Respondent shall write or rewrite and pass the Conduct and Practices Handbook course
offered by the Canadian Securities Institute or another course approved by the MFDA that
includes content concerning business ethics and procedure;

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DATED this [day] day of [month], 20[ ].
Per: __________________________

[Name of Public Representative], Chair
Per: _________________________

[Name of Industry Representative]
Per: _________________________

[Name of Industry Representative]

Doc 286831

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