MFDA Order

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File No. 201777

IN THE MATTER OF A SETTLEMENT HEARING PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Sentinel Financial Management Corp.

Order

(ARISING FROM SETTLEMENT HEARING ON AUGUST 28, 2018)

WHEREAS on August 8, 2018, the Mutual Fund Dealers Association of Canada (“MFDA”) issued a Notice of Settlement Hearing pursuant to section 24.4 of By-law No. 1 in respect of Sentinel Financial Management Corp. (the “Respondent”);

AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA, dated August 9, 2018 (“Settlement Agreement”), in which the Respondent agreed to a proposed settlement of matters for which the Respondent could be disciplined pursuant to ss. 20 and 24.1 of By-law No. 1;

AND WHEREAS the Hearing Panel is of the opinion that the Respondent:

  1. Between July 2012 and July 2016, failed to adequately conduct proper Tier 1 trade supervision to:
    1. ensure that each order accepted and each recommendation made for client accounts, including client accounts holding exempt market securities, were suitable for the clients and in keeping with those clients’ investment objectives and “Know Your Client” information; and
    2. perform supervisory inquiries, either adequately or at all, and maintain adequate records of trade supervision conducted including inquiries made, responses received, and resolutions achieved following supervisory inquiries, including with respect to exempt market products;

    contrary to MFDA Rule 2.2.1(c), and MFDA Policy No. 2;

  1. Commencing in April 2013, failed to adequately supervise the activity of an Approved Person, JW, who was under close supervision, including activity with respect to deficiencies in trade suitability and the collection of “Know Your Client” information, contrary to MFDA Rules 2.5.1, 2.2.1(a), 2.2.1(c), and 2.2.2;
  1. Commencing in June 2015, failed to adequately supervise the activity of an Approved Person, TM, who was under close supervision, including activity with respect to deficiencies in trade suitability and the collection of “Know Your Client” information, contrary to MFDA Rules 2.5.1, 2.2.1(a), 2.2.1(c), and 2.2.2; and
  1. Commencing in July 2012, failed to complete reviews of sub-branches and their Approved Persons, either adequately or at all, contrary to MFDA Policy No. 2 and MFDA Policy No. 5;

IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:

  1. The Respondent shall pay a fine in the amount of $75,000, pursuant to s. 24.1.2.(b) of MFDA By-law No. 1;
  1. The Respondent shall pay costs in the amount of $10,000, pursuant to s. 24.2 of MFDA By-law No. 1;
  1. The Respondent shall in the future comply with all MFDA By-laws, Rules and Policies, and all applicable securities legislation and regulations made thereunder, including MFDA Rules 2.2.1(a), 2.2.1(c), 2.2.2, 2.5.1, and MFDA Policies No. 2 and 5; and
  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.

DATED: Aug 28, 2018

"Graham Price"

Graham Price

Chair


"James Samanta"

James Samanta

Industry Representative


"Greg Wiebe"

Greg Wiebe

Industry Representative


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