Agreed Statement of Facts

I. Introduction

1. By Notice of Hearing dated July 28, 2016, the Mutual Fund Dealers Association of Canada (the “MFDA”) commenced a disciplinary proceeding against Jason Perry Boldt (the “Respondent”) pursuant to ss. 20 and 24 of MFDA By-law No. 1.

2. The Notice of Hearing set out the following allegations:
   1. Allegation #1: Between November 2011 and February 2013, the Respondent engaged in personal financial dealings with clients JH and HH and client SP when he arranged for the clients to loan at least $600,000 to a non-arm’s length corporation, thereby giving rise to a conflict or potential conflict of interest which the Respondent failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1.
   2. Allegation #2: Between November 2011 and October 2014, the Respondent was a director, shareholder and/or principal of three corporations which was not disclosed to, and approved by, the Member, contrary to MFDA Rules 1.2.1(c) (formerly MFDA Rule 1.2.1(d)), 1.1.2, 2.5.1, and 2.1.1.
   3. Allegation #3: Commencing in January 2015, the Respondent failed to cooperate with an investigation conducted by Staff of the MFDA, contrary to section 22.1 of MFDA By-law No. 1.

II. In public / In Camera

3. The Respondent and Staff of the MFDA (“Staff”) agree that this matter should be heard in public pursuant to Rule 1.8 of the MFDA Rules of Procedure.

III. Admissions and Issues to be Determined

4. The Respondent has reviewed this Agreed Statement of Facts and admits the facts set out in Part IV herein. The Respondent admits that the facts in Part IV constitute misconduct for which the Respondent may be penalized on the exercise of the discretion of a Hearing Panel pursuant to s. 24.1 of MFDA By-law No. 1.

5. Staff and the Respondent jointly request that the Hearing Panel determine, on the basis of this Agreed Statement of Facts, the appropriate penalty to impose on the Respondent.  

IV. Agreed Facts

6. Staff and the Respondent agree that submissions made with respect to the appropriate penalty are based only on the agreed facts in Part IV and no other facts or documents. In the event the Hearing Panel advises one or both of Staff and the Respondent of any additional facts it considers necessary to determine the issues before it, Staff and the Respondent agree that such additional facts shall be provided to the Hearing Panel only with the consent of both Staff and the Respondent.  If the Respondent is not present at the hearing, Staff may disclose additional relevant facts, at the request of the Hearing Panel.

7. Nothing in this Part IV is intended to restrict the Respondent from making full answer and defence to any civil or other proceedings against him.

Registration History

8. The Respondent has been registered as a mutual fund salesperson (now known as a dealing representative) since September 2000.

9. From November 2006 to September 2011, the Respondent was registered in Alberta as a mutual fund salesperson with Professional Investment Services (Canada) (“PIS), a former Member of the MFDA. In September 2011, Global Maxfin Investments Inc. (“Global Maxfin”), a Member of the MFDA, acquired PIS and the Respondent continued to be registered in Alberta as a mutual fund salesperson with Global Maxfin until they terminated him on October 8, 2014.

10. At all material times, the Respondent conducted business at a branch located in Edmonton, Alberta.

11. The Respondent has not been registered in the securities industry in any capacity since October 8, 2014.

Facts

12. At all material times, the Respondent was the sole known shareholder and director of a corporation incorporated in Alberta, 1601117 Alberta Ltd.

13. At all material times, 1601117 Alberta Ltd was the sole known shareholder of a corporation incorporated in Alberta, Spectra Investment Corporation (“Spectra”). The Respondent was also a director of Spectra.

14. At all material times, 1601117 Alberta Ltd was a shareholder of a corporation incorporated in Alberta, Innovate Building Inc. (“Innovate”). The Respondent was, or held himself out to be, a principal of Innovate.

Allegation #1:  Personal Financial Dealings with Clients

Clients JH and HH

15. In 2010, JH and HH became clients of PIS. The Respondent was the mutual fund salesperson responsible for servicing their accounts at PIS and subsequently at Global Maxfin.

16. On or about February 15, 2013, based upon a recommendation made by the Respondent, clients JH and HH signed an agreement to loan $300,000 to Spectra. The loan agreement included a term that clients JH and HH would be paid interest each quarter at a rate of 10% per annum.

17. On or about February 27, 2013, in furtherance of the loan agreement, clients JH and HH issued a cheque from their corporate account payable to Spectra in the amount of $300,000.

18. The Respondent advised clients JH and HH that Spectra would invest the proceeds of the loan in construction-related activities.

19. The Respondent arranged for the proceeds of the loan from clients JH and HH to be re-loaned or otherwise transferred from Spectra to Innovate.

20. On or about February 15, 2014, clients JH and HH sent an email to the Respondent to request a repayment of the loan.

21. On or about February 18, 2014, the Respondent sent an email to clients JH and HH stating, among other things:
    1. “I will begin the process of redeeming your funds immediately.  As we discussed, it takes about 90 days to get the funds back.  I will see if any of the other investors want to buy you out to speed things up.”

22. On or about June 18, 2014, clients JH and HH received $50,000 from Spectra.

23. From April 2013 to July 2014, clients JH and HH received a total of $40,000 in interest payments from Spectra in respect of the loan.

24. On or about August 14, 2014, the Respondent sent an email to clients JH and HH stating, among other things:
    1. “I am very sorry that an investment meant to earn you interest has become so difficult. I regret this and regret losing our relationship because of it. I will ensure that the funds are sent to your broker once the investments pay out.”

25. Clients JH and HH did not receive any further payments in respect of their loan to Spectra.

26. On or about August 21, 2014, clients JH and HH submitted a complaint to Global Maxfin with regards to the events described above.

Client SP

27. In November 2010, SP became a client of PIS. The Respondent was the mutual fund salesperson responsible for servicing client SP’s account at PIS and subsequently at Global Maxfin.

28. On or about November 1, 2011, client SP entered into an agreement to loan $300,000 to Spectra. The loan agreement included a term that client SP would be paid interest each quarter at a rate of 10% per annum.

29. On or about November 2, 2011, in furtherance of the loan agreement, client SP issued a cheque from her account at Global Maxfin payable to Spectra in the amount of $300,000.

30. On or about August 1, 2012, client SP transferred her mutual fund accounts out of Global Maxfin.

31. On or about September 2013, client SP entered into a second agreement to loan $500,000 to Spectra. The second loan agreement included a term that client SP would be paid interest each quarter at rate of 10% per annum.

32. In furtherance of the loan agreement, client SP issued a cheque payable to Spectra in the amount of $500,000. As such, the Respondent recommended and facilitated two loans in the collective amount of $800,000 from SP to Spectra, $300,000 of which was loaned while SP was a client of Global Maxfin.

33. Between November 2013 and September 2014, client SP received $172,500 in interest payments from Spectra.

34. On December 23, 2014, client SP commenced a lawsuit against the Respondent, Spectra, Global Maxfin and others with regards to the Respondent’s activities pertaining to the Spectra loans.

Clients CS, TK, HP and PP

35. In addition to the above, the Respondent also facilitated loans between the following clients of Global Maxfin and Spectra:

Clients	Date of Loan	Amount of Loan to Spectra	Interest Payment from Spectra
CS and JS	February 15, 2013	$250,000	$100,000
TK	May 6, 2011	$80,000	$25,205
HP and PP	September 1, 2011	$400,000	$130,000

36. Clients CS and JS were clients of PIS. The Respondent was the mutual fund salesperson responsible for servicing their accounts at PIS and subsequently at Global Maxfin.  CS and JS were clients of Global Maxfin at the time the Respondent facilitated their loan to Spectra.

37. Client TK was a client of PIS. The Respondent was the mutual fund salesperson responsible for servicing his account at PIS and subsequently at Global Maxfin.  TK was a client of Global Maxfin at the time the Respondent facilitated TK’s loan to Spectra.

38. Clients HP and PP were clients of PIS. The Respondent was the mutual fund salesperson responsible for servicing their accounts at PIS and subsequently at Global Maxfin.  Clients HP and PP were clients of Global Maxfin at the time the Respondent facilitated their loan to Spectra.

39. The Respondent did not disclose, and PIS and Global Maxfin were not otherwise aware of, his activities with respect to 1601117 Alberta Ltd., Spectra or Innovate. Global Maxfin first became aware of some of the Respondent’s activities in August 2014 when it received the complaint by clients JH and HH.

40. At all material times, Global Maxfin’s policies and procedures prohibited the Respondent from borrowing monies from clients.

Allegation #2: Dual Occupation/Outside Business Activity

41. At all material times, Global Maxfin’s policies and procedures required its Approved Persons, including the Respondent, to disclose and obtain prior written approval from Global Maxfin in order to engage in any outside business activities.

42. The Respondent did not disclose to Global Maxfin that he was:
    1. a director of 1601117 Alberta Ltd.;
    2. a director of Spectra;
    3. arranging for clients or other individuals to loan monies to Spectra; and/or
    4. a principal of Innovate.

43. The Respondent failed to obtain Global Maxfin’s written approval prior to engaging in activities with respect to 1601117 Alberta Ltd., Spectra and Innovate, as required by Global Maxfin’s policies and procedures.

44. By failing to disclose the Respondent’s involvement with 1601117 Alberta Ltd., Spectra and Innovate, the Respondent interfered with Global Maxfin’s ability to supervise his activities.

Allegation #3:  Failure to Cooperate

45. On January 8, 2015, Staff of the MFDA (“Staff”) sent a letter to the Respondent requesting his attendance at an interview for the purpose of providing a statement with respect to the events described above.

46. On January 23, 2015, the Respondent responded to Staff by email stating, “I have been unable to book a meeting until next week with my lawyer. Once I have had the meeting I will have my attorney contact you.” Staff did not receive a response from the Respondent or counsel acting on his behalf.

47. On February 17, 2015, Staff sent an email to the Respondent requesting that the Respondent or his counsel contact Staff by February 20, 2015 to arrange an interview. No response was received from the Respondent or counsel acting on his behalf.

48. Staff sent further letters and emails to the Respondent on March 9, 2015 and March 30, 2015 requesting his attendance at an interview.

49. Between April 8, 2015 and May 19, 2015, the Respondent and Staff corresponded via email in regards to the Respondent’s attendance at an interview. On May 19, 2015, the Respondent sent an email to Staff stating, among other things:
    1. “…I would like to agree that I violated MFDA rules by having outside business activities.  I did have ownership in Innovate while still holding a license.  That being said, I don’t think there is a need for a meeting.   I no longer hold a license and am willing to accept whatever fine the MFDA sees fit to apply to me.”

50. Between May 19 and 26, 2015, Staff and the Respondent corresponded via email and telephone with respect to scheduling an interview. On May 26, 2015, Staff sent an email to the Respondent setting the date of the interview for July 16, 2015.

51. On July 16, 2015, the Respondent failed to attend the interview with Staff. The Respondent has not attended any interviews with Staff.

Misconduct Admitted

52. By engaging in the conduct described above, the Respondent admits that:
    1. between May 2011 and February 2013, the Respondent engaged in personal financial dealings with clients JH and HH; client SP; clients CS and JS; client TK; and clients HP and PP when he arranged for the clients to loan at least $1,330,000 to a non-arm’s length corporation, thereby giving rise to a conflict or potential conflict of interest which the Respondent failed to address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1.
    2. between May 2011 and October 2014, the Respondent was a director, shareholder and/or principal of three corporations which was not disclosed to, and approved by, the Member, contrary to MFDA Rules 1.2.1(c) (formerly MFDA Rule 1.2.1(d)), 1.1.2, 2.5.1, and 2.1.1.
    3. commencing in January 2015, the Respondent failed to cooperate with an investigation conducted by Staff of the MFDA, contrary to section 22.1 of MFDA By-law No. 1.

Execution of Agreed Statement of Facts

53. This Agreed Statement of Facts may be signed in one or more counterparts which together shall constitute a binding agreement.

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