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MFDA SETTLEMENT AGREEMENT

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HomeCompleted Hearings201855 - Bradley Wayne Archer › SA201855

File No. 201855

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: Bradley Wayne Archer

SETTLEMENT AGREEMENT

I. INTRODUCTION

  1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Bradley Wayne Archer (the “Respondent”), consent and agree to settlement of this matter by way of this agreement (the “Settlement Agreement”).
  2. Staff conducted an investigation of the Respondent’s activities which disclosed activity for which the Respondent could be penalized on the exercise of the discretion of the Hearing Panel pursuant to s. 24.1 of By-law No.1.

II. JOINT SETTLEMENT RECOMMENDATION

  1. Staff and the Respondent jointly recommend that the Hearing Panel accept the Settlement Agreement.
  2. The Respondent admits to the following violations of the By-laws, Rules or Policies of the Mutual Fund Dealers Association of Canada (“MFDA”):
    1. between December 2002 and June 2016, the Respondent signed the signature of a client on 21 account forms, and submitted the account forms to the Member for processing, contrary to MFDA Rule 2.1.1; and
    2. between 2015 and 2016, the Respondent obtained and possessed 4 pre-signed account forms in respect of 3 clients, contrary to MFDA Rule 2.1.1.
  3. Staff and the Respondent agree and consent to the following terms of settlement:
    1. the Respondent shall be prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member for a period of 9 months commencing from the date of the final Order herein, pursuant to s. 24.1.1.(e) of MFDA By-law No. 1;
    2. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
    3. the Respondent will attend in person or by teleconference on the date set for the Settlement Hearing.
  4. Staff and the Respondent agree to the settlement on the basis of the facts set out in Part III herein and consent to the making of an Order in the form attached as Schedule “A”.

III. AGREED FACTS

Registration history

  1. Between 2002 and 2016, the Respondent was registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with State Farm Investors Services (Canada) Co. (“State Farm”), a former Member of the MFDA.
  2. On December 16, 2016, State Farm terminated the Respondent as a result of the conduct that is the subject of this Settlement Agreement and the Respondent is no longer registered in the securities industry in any capacity.
  3. At all material times, the Respondent conducted business in the Chatham, Ontario area.

Respondent signed a client’s signature

  1. Between December 2002 and June 2016, the Respondent signed the signature of client CA on 21 account forms, and submitted the account forms to the Member for processing.
  2. The account forms consisted of redemption forms, application forms, RESP educational assistance payment forms, a mutual fund purchase disclosure form, and a Know-Your-Client form.
  3. Client CA is the Respondent’s spouse.

Pre-Signed account forms

  1. At all material times, State Farm’s policies and procedures prohibited its Approved Persons, including the Respondent, from using pre-signed account forms.
  2. Between 2015 and 2016, the Respondent obtained and possessed 4 pre-signed account forms in respect of 3 clients.
  3. The pre-signed account forms consisted of a transfer authorization form, a pre-authorized chequing/systematic withdrawal plan form, a Know-Your-Client update form, and a new account application form.

State Farm’s Investigation

  1. On September 29, 2016, during the course of a branch review, State Farm identified the pre-signed account forms that are the subject of the Settlement Agreement. As a result, State Farm conducted a further review of client files serviced by the Respondent and identified the account forms on which the Respondent signed client CA’s signature that are the subject of the Settlement Agreement.
  2. State Farm contacted all clients for whom the Respondent obtained pre-signed account forms or signed the client’s signature, who all confirmed that they authorized the transactions in question.
  3. On December 16, 2016, State Farm terminated the Respondent’s registration.

Additional Factors

  1. The Respondent has been diagnosed with a serious medical condition. Staff took the Respondent’s medical condition into account when agreeing to a penalty that did not include the requirement to pay a fine or costs.
  2. The Respondent acknowledges that if it were not for his medical condition it would have been appropriate for him to be subject to a penalty that included a fine and costs due to the conduct that is the subject of this Settlement Agreement.
  3. There is no evidence that the Respondent received any benefit from the conduct set out above beyond the commissions or fees he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
  4. There is no evidence of client loss or lack of authorization for the underlying transactions.
  5. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
  6. By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducting a full hearing on the allegations.

IV. ADDITIONAL TERMS OF SETTLEMENT

  1. This settlement is agreed upon in accordance with section 24.4 of MFDA By-law No. 1 and Rules 14 and 15 of the MFDA Rules of Procedure.
  2. The Settlement Agreement is subject to acceptance by the Hearing Panel which shall be sought at a hearing (the “Settlement Hearing”). At, or following the conclusion of, the Settlement Hearing, the Hearing Panel may either accept or reject the Settlement Agreement. MFDA Settlement Hearings are typically held in the absence of the public pursuant to section 20.5 of MFDA By-law No. 1 and Rule 15.2(2) of the MFDA Rules of Procedure. If the Hearing Panel accepts the Settlement Agreement, then the proceeding will become open to the public and a copy of the decision of the Hearing Panel and the Settlement Agreement will be made available at mfda.ca.
  3. The Settlement Agreement shall become effective and binding upon the Respondent and Staff as of the date of its acceptance by the Hearing Panel. Unless otherwise stated, any monetary penalties and costs imposed upon the Respondent are payable immediately, and any suspensions, revocations, prohibitions, conditions or other terms of the Settlement Agreement shall commence, upon the effective date of the Settlement Agreement.
  4. Staff and the Respondent agree that if this Settlement Agreement is accepted by the Hearing Panel:
    1. the Settlement Agreement will constitute the entirety of the evidence to be submitted respecting the Respondent in this matter;
    2. the Respondent waives any 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;
    3. Staff will not initiate any proceeding under the By-laws of the MFDA against the Respondent in respect of the contraventions described in this Settlement Agreement. Nothing in this Settlement Agreement precludes Staff from investigating or initiating proceedings in respect of any contraventions that are not set out in this Settlement Agreement.  Furthermore, nothing in this Settlement Agreement shall relieve the Respondent from fulfilling any continuing regulatory obligations;
    4. 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; and
    5. 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 the Respondent.
  5. If, for any reason, this Settlement Agreement is not accepted 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 the Settlement Agreement or the settlement negotiations.
  6. Staff and the Respondent agree that the terms of the 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.
  7. The Settlement Agreement may be signed in one or more counterparts which together shall constitute a binding agreement. A facsimile copy of any signature shall be effective as an original signature.

DATED: Nov 9, 2018

"CW"

Witness – Signature


CW

Witness – Print Name

“Bradley Wayne Archer”

Bradley Wayne Archer


 

“Shaun Devlin ”

Staff of the MFDA
Per: Shaun Devlin
Senior Vice-President,
Member Regulation – Enforcement


Schedule “A”

Order
File No.

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: Bradley Wayne Archer

ORDER

WHEREAS on May 3, 2018, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Hearing pursuant to ss. 20 and 24 of By-law No. 1 in respect of Bradley Wayne Archer (the “Respondent”);

AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA, dated November 9, 2018 (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 the Hearing Panel is of the opinion that:

  1. between December 2002 and June 2016, the Respondent signed the signature of a client on 21 account forms, and submitted the account forms to the Member for processing, contrary to MFDA Rule 2.1.1; and
  2. between 2015 and 2016, the Respondent obtained and possessed 4 pre-signed account forms in respect of 3 clients, contrary to MFDA Rule 2.1.1;

IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:

  1. The Respondent shall be prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member for a period of 9 months commencing from the date of this Order, pursuant to s. 24.1.1.(e) of MFDA By-law No. 1;
  2. The Respondent shall in the future comply with MFDA Rule 2.1.1; and
  3. If at any time a non-party to this proceeding, with the exception of the bodies set out in section 23 of MFDA By-law No. 1, requests production of or access to exhibits in this proceeding that contain personal information as defined by the MFDA Privacy Policy, then the MFDA Corporate Secretary shall not provide copies of or access to the requested exhibits to the non-party without first redacting from them any and all personal information, pursuant to Rules 1.8(2) and (5) of the MFDA Rules of Procedure.

DATED this [day] day of [month], 20[  ].

Per:      __________________________
[Name of Public Representative], Chair

Per:      _________________________
[Name of Industry Representative]

Per:      _________________________
[Name of Industry Representative]