MFDA Agreed Statement of Facts

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File No. 202060

Re: Derek Jarod Targerson

Agreed Statement of Facts

I. INTRODUCTION

  1. By Notice of Hearing dated 4 January 2021, the Mutual Fund Dealers Association of Canada (the “MFDA”) commenced a disciplinary proceeding against Derek Jarod Targerson (the “Respondent”) pursuant to ss. 20 and 24 of MFDA By-law No. 1, alleging:
    1. Allegation #1:On or about August 29, 2017, the Respondent signed a client’s signature on 2 account forms and submitted the forms to the Member for processing, contrary to MFDA Rule 2.1.1.
    2. Allegation #2: On or about August 29, 2017, the Respondent created a meeting note that falsely stated that the Respondent had met with and obtained the signatures of a client on account forms, when the Respondent had not met with the client, contrary to MFDA Rule 2.1.1.

II. IN PUBLIC / IN CAMERA

  1. 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

  1. 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.
  2. 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

  1. Staff and the Respondent agree that submissions made with respect to the appropriate penalty should be based only on the agreed facts in Part IV, and no other information or documents, subject to the content of this paragraph and paragraph 6 below.
  2. In the event that the Hearing Panel advises one or both of Staff and the Respondent of any additional facts that it considers necessary in order to determine the issues before it, Staff and the Respondent agree that such additional facts may be provided to the Hearing Panel, either: (a) with the consent of both Staff and the Respondent if the additional facts are agreed upon; (b) if the Respondent is not present at the hearing, Staff may disclose additional relevant facts, at the request of the Hearing Panel; or (c) if the parties are both present at the hearing and are not in agreement about the additional facts requested by the Hearing Panel, the parties will be given a reasonable opportunity to lead evidence concerning the additional facts. In circumstances where a party leads evidence concerning additional facts requested by the Hearing Panel, the opposing party may cross-examine any witness tendered to lead such evidence and shall be given a reasonable opportunity to lead responding evidence if they wish to do so.
  3. 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

  1. Commencing in January 2013, the Respondent was registered in the securities industry.
  2. From January 2017 to March 2018, the Respondent was registered in Saskatchewan as a dealing representative with Credential Asset Management Inc. (the “Member”).
  3. From March 2018 to June 2019, the Respondent was registered in Saskatchewan and Alberta as a dealing representative of the Investment Industry Regulatory Organization of Canada with, Credential Qtrade Securities Inc., an affiliate of the Member.
  4. On June 24, 2019, Credential Qtrade Securities Inc. terminated the Respondent for the conduct described herein, and he is not currently registered in the securities industry in any capacity.
  5. At all material times, the Respondent carried on business in the Swift Current, Saskatchewan area.

Signing a Client’s Signature

  1. At all material times, the policies and procedures of the Member prohibited Approved Persons from signing a client’s name on account forms regardless of the circumstances.
  2. At all material times, client LB maintained accounts at the Member, including a Tax Free Savings Account (the “TFSA account”), which were serviced by the Respondent.
  3. On or about August 29, 2017, the Respondent signed client LB’s signatures on two account forms and submitted them to the Member for processing.
  4. The Respondent signed client LB’s signatures on electronic transfer authorization forms that were used to transfer proceeds from client LB’s TFSA account at the Member to client LB’s account at another financial institution.
  5. The Member confirmed with client LB that she had authorized the redemptions from her TFSA account at the Member, and that the redemptions from that account were deposited to her account at another financial institution.

False Notes of a Client Meeting

  1. On or around August 29, 2017, the Respondent created a meeting note in the client file of client LB that falsely stated that the Respondent had met with and obtained the signature of client LB on the account forms described above in paragraph 16, when the Respondent had not met with the client or obtained the client’s signature on the account forms.

Additional Factors

  1. On October 19, 2017, the Respondent completed the Member’s Annual Declaration in which he confirmed his understanding of the Member’s policies and procedures against signature falsification.
  2. There is no evidence of client complaints, loss, or that underlying transactions were unauthorized.
  3. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above beyond any commissions and fees that he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
  4. The Respondent has not previously been the subject of an MFDA disciplinary proceeding.

Misconduct Admitted

  1. By engaging in the conduct described above, the Respondent admits that:
    1. On or about August 29, 2017, the Respondent signed a client’s signature on 2 account forms and submitted the forms to the Member for processing, contrary to MFDA Rule 2.1.1; and
    2. On or about August 29, 2017, the Respondent created a meeting note that falsely stated that the Respondent had met with and obtained the signatures of a client on account forms, when the Respondent had not met with the client, contrary to MFDA Rule 2.1.1.

Execution of Agreed Statement of Facts

  1. This Agreed Statement of Facts may be signed in one or more counterparts which together shall constitute a binding agreement.
  2. A facsimile copy of any signature shall be effective as an original signature.

DATED: Apr 11, 2021

"Derek Jarod Targerson"

Derek Jarod Targerson

“Charles Toth”

Staff of the MFDA
Per: Charles Toth
Vice-President, Enforcement

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