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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: Kindle Briten Megan Blythe

Order

(ARISING FROM SETTLEMENT HEARING ON JANUARY 6, 2020)

WHEREAS on March 21, 2019, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Hearing pursuant to sections 20 and 24 of MFDA By-law No. 1 commencing a disciplinary proceeding against Kindle Briten Megan Blythe (the “Respondent”) and Mohammad Movassaghi (“Movassaghi”);

AND WHEREAS the Respondent entered into a settlement agreement with the MFDA, dated January 2, 2020 (the “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 MFDA By-law No. 1;

AND WHEREAS on January 3, 2020, the MFDA announced that pursuant to section 24.4 of MFDA By-law No. 1 a settlement hearing would be held in respect of the conduct of the Respondent (the “Settlement Hearing”);

AND WHEREAS the MFDA and the Respondent jointly request that the Hearing Panel abridge the 10 day notice period of the settlement hearing required by MFDA Rule of Procedure 15.2 in order to permit the Hearing Panel to consider the Settlement Agreement today, and the Hearing Panel is of the opinion that it is in the interest of the public to abridge the 10 day notice period pursuant to MFDA Rule of Procedure 2.2(1)(a);

AND WHEREAS on the basis of the facts admitted in Part IV of the Settlement Agreement and the contraventions admitted in Part V of the Settlement Agreement, the Hearing Panel is of the opinion that:

  1. between April 8, 2015 and June 9, 2015, the Respondent submitted 3 KYC Update Forms to the Member to update account records of client X without exercising due diligence to ensure that client X was aware of and had authorized the changes to her KYC information, contrary to the policies and procedures of the Member and MFDA Rules 2.2.1, 2.5.1, 2.10, and 1.1.2;
  2. between January 2015 and June 2016, the Respondent facilitated the processing of approximately 180 trades in the investment accounts of client X without exercising due diligence to ensure that client X had authorized all elements of the trades that were processed in client X’s account, contrary to the policies and procedures of the Member and MFDA Rules 2.3.1(a) [now MFDA Rule 2.3.1(b))[1]], 2.10 and 1.1.2; and
  3. between January 2015 and June 2016, the Respondent created records of purported instructions received from client X which had not in fact been received and failed to exercise due diligence to ensure that the records of instructions that she created accurately described instructions that had been received from client X, contrary to the policies and procedures of the Member and MFDA Rules 5.1(b), 2.10, 2.5.1 and 1.1.2.

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

    1. The 10 day notice period to the public of the settlement hearing is abridged pursuant to MFDA Rule of Procedure 2.2(1)(a) and the Hearing Panel will consider the Settlement Agreement today;
    2. The Respondent shall pay a fine in the amount of $35,000, pursuant to s. 24.1.1(b) of MFDA By-law No. 1 which shall be payable in instalments as follows:
      1. $5,000 payable on February 1, 2020;
      2. $5,000 payable on March 1, 2020;
      3. $5,000 payable on April 1, 2020;
      4. $10,000 payable on May 1, 2020; and
      5. $10,000 payable on June 1, 2020.
    3. On the date of this Order, the Respondent shall pay the costs in the amount of $5,000 in certified funds, pursuant to section 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.

[1] On January 19, 2017, MFDA Rule 2.3.1 was amended.  The prohibition on discretionary trading was moved from MFDA Rule 2.3.1(a) to MFDA Rule 2.3.1(b).

  • Michael Carroll
    Michael Carroll
    Chair
  • Kathleen Jost
    Kathleen Jost
    Industry Representative
  • Holly Millar
    Holly Millar
    Industry Representative

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