Order

WHEREAS on May 3, 2019, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Hearing pursuant to sections 20 and 24 of By-law No. 1 in respect of a disciplinary proceeding commenced against Meng Xi Li (the “Respondent”);

AND WHEREAS the first appearance in this proceeding took place by teleconference before the Chair of a hearing panel of the Pacific Regional Council of the MFDA (the “Hearing Panel”) on July 3, 2019 at 10:00 a.m. (Pacific) in accordance with s. 19.13(b) of MFDA By-Law No. 1;

AND WHEREAS at the first appearance, no one appeared on behalf of the Respondent;

AND WHEREAS on July 3, 2019, the Hearing Panel deemed the manner of service of the Notice of Hearing to be effective on the Respondent;

AND WHEREAS on January 16, 2020, the Hearing Panel conducted a hearing of the matters as described in the Notice of Hearing;

AND WHEREAS no one appeared on behalf of the Respondent, although notified of the hearing by Staff as to the purpose, timing, and location of the hearing;

AND WHEREAS in the opinion of the Hearing Panel, the Respondent:

1. between January 2016 and January 2017, allowed a client to open and trade in an investment account at the Member using the identity and contact information of a different individual, thereby concealing the identity of the true account holder, and circumventing the Member’s account and trade supervision processes, contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.2.1, 2.5.1 and 1.1.2;
2. between January 2016 and January 2017, recorded notes in the Member’s client management system which falsely described trade instructions for trades submitted in a client account, thereby misleading the Member and circumventing the Member’s account and trade supervision processes, contrary to MFDA Rule 2.1.1;
3. in September 2016, transferred $100,000 from a client investment account to the Respondent’s personal bank account, thereby engaging in personal financial dealings with the client which gave rise to a conflict or potential conflict of interest that the Respondent failed to disclose to the Member or address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the policies and procedures of the Member and MFDA Rules 2.1.4 and 2.1.1;
4. commencing in January 2017, made false or misleading statements to the Member and/or Staff of the MFDA during the course of investigations into her conduct, contrary to MFDA Rule 2.1.1; and
5. on November 2, 2016, falsified a client’s signature on an account form and submitted it to the Member for processing, contrary to MFDA Rule 2.1.1.

IT IS HEREBY ORDERED THAT:

1. the Respondent shall be permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member, pursuant to s. 24.1.1(e) of MFDA By-law No. 1;
2. the Respondent shall pay a fine in the amount of $100,000, pursuant to s. 24.1.1(b) of MFDA By-law No. 1;
3. the Respondent shall pay costs attributable to conducting the investigation and hearing of this matter in the amount of $7,500, pursuant to s. 24.2 of MFDA By-law No. 1; and
4. 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.