MFDA Order

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IN THE MATTER OF A DISCIPLINARY HEARING PURSUANT TO SECTION 24.3 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: TeamMax Investment Corporation and Antony Chau

Order

WHEREAS on July 7, 2014, 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 against TeamMax Investment Corporation (“TeamMax”), a Member of the MFDA, and Antony Chau (“Chau”), an Approved Person of TeamMax (collectively, the “Respondents”);

AND WHEREAS the application was brought before a hearing panel of the Central Regional Council of the MFDA (the “Hearing Panel”) with notice to the Respondents on July 8, 2014 at the offices of the MFDA located at 121 King Street West, Suite 1000, Toronto, Ontario;

AND WHEREAS during the hearing of the application the Hearing Panel considered the evidence filed and the submissions of Staff of the MFDA (“Staff”) and counsel for the Respondents;

AND WHEREAS in April 2014 TeamMax retained, at its own expense and on terms acceptable to Staff, a Chief Compliance Officer (the “CCO”) and an independent consultant to: (1) perform all necessary and ongoing duties and functions of a CCO, as such duties and functions are prescribed by MFDA By-laws, Rules and Policies, including but not limited to MFDA Rule 2.5.3 (the “CCO Responsibilities”); and (2) resolve compliance deficiencies identified by Staff regarding the operation of TeamMax (the “Deficiencies”);

AND WHEREAS TeamMax, Chau and Staff consent to the terms of the within Order;

AND WHEREAS in the opinion of the Hearing Panel it is in the public interest to impose the terms set out in this Order;

IT IS HEREBY ORDERED THAT:

  1. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1, TeamMax shall perform, to the satisfaction of Staff, the following duties and responsibilities (the “Duties and Responsibilities”):
    1. TeamMax shall resolve any and all Deficiencies identified by Staff in regards to the operation of TeamMax;
    2. TeamMax shall:
      1. no later than July 15, 2014, provide to Staff a list of all its non-registered leveraged accounts (the “Accounts”);
      2. no later than December 31, 2014, complete a historical leverage review of the Accounts as directed by Staff (the “Historical Leverage Review”);
      3. commencing July 31, 2014, and on the last business day of every subsequent month until the Historical Leverage Review is completed, submit to Staff monthly reports concerning the status of the Historical Leverage Review in a format acceptable to Staff;
      4. no later than December 31, 2014, or within such other length of time agreed to by Staff, take remedial measures required, if any, to address the concerns raised by the Historical Leverage Review of the Accounts (the “Leverage Remedial Measures”); and
    3. TeamMax shall respond to all existing and future requests from Staff for information, documents and clarifications within the reasonable time periods specified in such requests;
  1. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1, until such time TeamMax has, to the satisfaction of Staff, resolved the Deficiencies, completed the Historical Leverage Review and taken the necessary Leverage Remedial Measures, TeamMax shall not do the following things (the “Leveraging Restrictions”) without the prior written consent of Staff:
    1. open any new non-registered leveraged client accounts; and
    2. make any new leveraged trade recommendations or process any leveraged trades in any existing non-registered client accounts;
  1. Pursuant to s. 24.3.3(b) of MFDA By-law No. 1, until such time TeamMax has, to the satisfaction of Staff, resolved the Deficiencies, TeamMax shall not do the following things (the “Growth Restrictions”) without the prior written consent of Staff:
    1. hire or retain any new dealing representatives; and
    2. open any new branch or sub-branch locations;
  1. Pursuant to s. 24.3.3(a) of MFDA By-law No. 1, Chau shall not become registered as TeamMax’s CCO unless Chau provides Staff with at least 60 days’ notice of his intention to seek registration as TeamMax’s CCO in order to allow Staff the opportunity to attend before a hearing panel of the MFDA to seek any orders or terms and conditions on Chau’s ability to conduct securities related business;
  1. In the event the CCO appointed and retained by TeamMax in April 2014 is no longer willing or able to perform the CCO Responsibilities, TeamMax shall, at its own expense and within 30 days of the CCO resignation or termination, or within such other length of time agreed to by Staff, appoint another individual as its new CCO, other than Chau, to perform all necessary and ongoing duties and functions of a CCO, as such duties and functions are prescribed by MFDA By-laws, Rules and Policies, including but not limited to MFDA Rule 2.5.3;
  1. Chau, as TeamMax’s ultimate designated person, is responsible for ensuring that TeamMax comply with the terms of this Order. In the event that TeamMax breaches any of the Leveraging and Growth Restrictions, TeamMax does not perform the Duties and Responsibilities to the satisfaction of Staff, or TeamMax and Chau do not otherwise comply with the terms set out in paragraphs 1 to 5 above, Staff may re-attend before the Hearing Panel to seek such further orders and directions as may be reasonably necessary to give effect to the terms of this Order, including an order suspending the rights and privileges of Membership of TeamMax in the MFDA, and the existing procedures for applications made under section 24.3 of MFDA By-law No. 1 shall continue to apply, including Staff’s ability to seek to have such re-attendances made with or without notice to TeamMax in-person, in writing or by way of electronic hearing, as time or circumstances reasonably require and the Hearing Panel permits; and
  1. This proceeding is adjourned sine die.

DATED: Jul 8, 2014

"Thomas J. Lockwood"

Thomas J. Lockwood

Chair


"Guenther Kleberg"

Guenther Kleberg

Industry Representative


"Linda J. Anderson"

Linda J. Anderson

Industry Representative


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