WHEREAS on October 20, 2021, the Mutual Fund Dealers Association of Canada (“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 Paul David Gowan (the “Respondent”);
AND WHEREAS on December 3, 2021, the MFDA issued a news release announcing that the first appearance in this proceeding would take place before a Hearing Panel of the MFDA’s Central Regional Council (the “Hearing Panel) on December 14, 2021 to schedule a date for the commencement of the hearing on the merits and to address any other procedural issues;
AND WHEREAS on December 14, 2021, the MFDA issued a news release announcing that a further appearance in this proceeding would take place on December 21, 2021;
AND WHEREAS on December 16, 2021, the MFDA issued a news release announcing that it proposes to hold a hearing on December 21, 2021 to consider whether, pursuant to section 24.4 of By-law No. 1, a Hearing Panel of MFDA should accept the settlement agreement entered into between Staff of the MFDA (“Staff”) and the Respondent;
AND WHEREAS the Respondent entered into a settlement agreement with Staff, dated December 14, 2021 (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 the Hearing Panel is of the opinion that between November 2017 and April 2018, he signed or submitted account documents obtained by an unregistered individual to conduct securities related business and updated Know-Your-Client information of clients of the Member without using the necessary due diligence to learn the essential facts relative to the clients, ensuring that transactions processing in their accounts were suitable, or ensuring that the transactions were authorized, thereby facilitating stealth advising, contrary to MFDA Rules 1.1.1(c), 2.2.1, and 2.1.1.
IT IS HEREBY ORDERED THAT the ten day notice period required according to Rule 15.2 of the MFDA Rules of Procedure is abridged pursuant to the discretion of the Hearing Panel exercised in accordance with Rules 1.3, 1.5 and 2.2(1)(a) of the MFDA Rules of Procedure and the Settlement Agreement is accepted, as a consequence of which:
- The Respondent is prohibited from conducting securities related business in any capacity while in the employ of or in association with a Member of the MFDA for a period of 1 year from the date of this Order, pursuant to section 24.1.1(e) of MFDA By-law No. 1.
- The Respondent shall pay a fine of $15,000 in certified funds on the date of this Order, pursuant to section 24.1.1(b) of MFDA By-law No. 1.
- The Respondent shall pay costs of $5,000 in certified funds on the date of this Order, pursuant to section 24.2 of MFDA By-law No. 1.
- The Respondent shall in the future comply with MFDA Rules 1.1.1(c), 2.2.1, and 2.1.1.
Paul M. MoorePaul M. MooreChair
Guenther KlebergGuenther KlebergIndustry Representative
Timothy J. PryorTimothy J. PryorIndustry Representative