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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: Wealthsimple Advisor Services Inc.

Order

(ARISING FROM THE SETTLEMENT HEARING ON NOVEMBER 23, 2022)

WHEREAS on September 6, 2022, the Mutual Fund Dealers Association of Canada (the “MFDA”) provided notice to the public of a Settlement Hearing in respect of Wealthsimple Advisor Services Inc. (the “Respondent”);

AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA, dated October 31, 2022 (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 based upon the admissions of the Respondent, the Hearing Panel is of the opinion that:

  1. between February 2019 and August 2019, the Respondent implemented a process for onboarding Approved Persons of other MFDA Members and Investment Dealers which failed to ensure that potential clients had consented to the disclosure of their confidential information to a company affiliated with the Respondent, thereby failing to implement an adequate system of controls and supervision over its onboarding process, contrary to MFDA Rules 2.1.3, 2.5.1 and 2.1.1; and
  2. between April 1, 2019 and May 27, 2019, the Respondent failed to implement an adequate system of controls and supervision over its process for onboarding Approved Persons of other MFDA Members and Investment Dealers by failing to prevent staff of an affiliated company from viewing and accessing the system of another MFDA Member in order to assist an incoming Approved Person to transfer confidential client information without the other MFDA Member’s knowledge or consent, contrary to MFDA Rules 2.1.3, 2.5.1 and 2.1.1.

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 $100,000, pursuant to s. 24.1.2(b) of MFDA By-law No. 1, which shall be payable in certified funds on the date that this Settlement Agreement is accepted by the Hearing Panel;
  2. The Respondent shall pay costs in the amount of $20,000, pursuant to s. 24.2 of MFDA By-law No. 1, which shall be payable in certified funds on the date that this Settlement Agreement is accepted by the Hearing Panel; and
  3. 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.
  • Martin Friedland
    Martin Friedland
    Chair
  • Brigitte J. Geisler
    Brigitte J. Geisler
    Industry Representative
  • Patrick Galarneau
    Patrick Galarneau
    Industry Representative

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