Order

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File No. 2016107

IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 24.3 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: International Capital Management Inc., John Paul Sanchez and Javier Andreas Sanchez

Order

(ARISING FROM APPEARANCE ON JANUARY 27, 2017)

WHEREAS on December 13, 2016, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Application pursuant to section 24.3 of MFDA By-law No. 1 (the “By-law”) in respect of an application to be brought with notice to the respondents against International Capital Management Inc. (“ICM”), a Member of the MFDA, and John Paul Sanchez (“John”), an Approved Person of ICM and Javier Andreas Sanchez (“Javier”), an Approved Person of ICM (collectively, the “Respondents”);

AND WHEREAS the application was brought on notice to the Respondents before a Hearing Panel of the Central Regional Council of the MFDA (the “Hearing Panel”) on December 16, 2016 at the Hearing Room located at the offices of the MFDA located at 121 King Street West, Suite 1000, Toronto, Ontario;

AND WHEREAS pursuant to section 24.3 of MFDA By-law No. 1, the Hearing Panel issued an order dated December 16, 2016;

AND WHEREAS a further appearance was scheduled to take place on January 24, 2017 at 11:00 a.m. (Eastern);

AND WHEREAS a dispute arose between Staff and the Respondents concerning the language of a letter to be sent to all clients of ICM;

AND WHEREAS the appearance scheduled to take place on January 24, 2017 was adjourned at the request of counsel for the Respondents to January 27, 2017 at 10:00 a.m. (Eastern);

AND WHEREAS Staff, the Respondents and their counsel and the Chair of the Hearing Panel attended the Hearing in Person and the other Members of the Hearing Panel participated in the appearance electronically by teleconference;

AND UPON READING two briefs of correspondence exchanged between Staff and the Respondents between December 16, 2016 and January 27, 2017;

AND UPON HEARING the submissions of counsel for Staff, counsel for the Respondents and counsel for Invoice Payment System Corporation;

IT IS HEREBY ORDERED THAT:

  1. On or before Friday, February 3, 2017, ICM shall send a letter to all clients of ICM in the form and containing the content attached as Schedule “A” to this Order.
  1. 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; and
  1. This proceeding is adjourned sine die.
Dated: January 27, 2017
  • Mark J. Sandler
    Mark J. Sandler
    Chair
  • Linda J. Anderson
    Linda J. Anderson
    Industry Representative
  • Lorraine Bate-Boerop
    Lorraine Bate-Boerop
    Industry Representative

522625 v1

Schedule “A”

[Date], 2017

ICM Client

SUBJECT: International Capital Management Inc.

This letter is to follow on from the letter sent out on December 23, 2016.

As we advised on December 23, 2016, for future deposits and redemptions, all cheques must be made payable to and from the issuer of the funds and not to and from ICM. We will direct you accordingly for each purchase and look forward to meeting you to direct you in respect of your RRSP and other contributions this year.  We also take this opportunity to advise that ICM will be restricted solely to our Mutual fund and GIC business and will no longer be conducting our alternative investment business and therefore, we will not be providing further advice or accepting further deposits for these alternative investments.  These terms and conditions have been ordered by the Mutual Fund Dealers Association of Canada (the “MFDA”).  For further details, please access the MFDA website at https://mfda.ca/case-order/order2016107/

If you have previously invested in promissory notes issued by Invoice Payment System Corporation (“IPS”) and require advice with respect to these investments, we recommend that you obtain independent advice from a legal or accounting professional or from another securities industry registrant concerning these investments. In addition, your independent advisor may wish to contact IPS directly.

If you have previously invested in promissory notes issued by Energentium Inc. (“Energentium”) and require advice with respect to these investments, we recommend that you obtain independent advice from a legal or accounting professional or from another securities industry registrant concerning these investments. In addition, your independent advisor may wish to contact Energentium directly.

We are also planning to seek approval from the MFDA, to enter into an agreement to transfer ICM client accounts to an investment dealer registered with the Investment Industry Regulatory Organization of Canada (IIROC).  We will continue to keep you informed about developments with respect to that process.

Sincerely

 

John Sanchez