WHEREAS on December 5, 2022, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Settlement Hearing pursuant to section 24.4 of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 7.4.4) in respect of a disciplinary hearing against Megha Arora (the “Respondent”);
AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA dated December 6, 2022 (the “Settlement Agreement”), in which the Respondent agreed to a proposed settlement of matters for which the Respondent could be disciplined pursuant to sections 20 and 24.1 of MFDA By-law No. 1 (now Mutual Fund Dealer Rules 7.3 and 7.4.1);
AND WHEREAS on January 1, 2023, the MFDA and the Investment Industry Regulatory Organization of Canada (“IIROC”) consolidated to form the New Self-Regulatory Organization of Canada (the “Corporation”);
AND WHEREAS on March 7, 2023, the Corporation issued a news release to provide notice to the public that the Settlement Hearing in respect of the Respondent was postponed to take place on March 29, 2023;
AND WHEREAS based upon the admissions of the Respondent in the Settlement Agreement, the Hearing Panel is of the opinion that between November 2018 and July 2020, the Respondent altered client contact information on the Dealer Member’s system without the knowledge or authorization of the client, which had the effect of avoiding the Dealer Member’s supervisory and training controls and impacted its ability to communicate with clients, contrary to MFDA Rules 2.1.1, and 2.1.4 (now Mutual Fund Dealer Rules 2.1.1 and 2.1.4(2)).
IT IS HEREBY ORDERED THAT 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 associated with any MFDA Member for a period of 18 months commencing on the date of this Order, pursuant to s. 24.1.1(e) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 220.127.116.11(e));
- The Respondent shall pay a fine in the amount of $5,000 in certified funds on the date of this Order, pursuant to s. 24.1.1(b) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 18.104.22.168(b));
- The Respondent shall pay costs in the amount of $5,000 in certified funds on the date of this Order, pursuant to s. 24.2 of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 7.4.2);
- The Respondent shall complete an ethics or professional conduct course or another course acceptable to Staff of the Corporation prior to becoming re-registered as an Approved Person, pursuant to s. 24.1.1(f) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 22.214.171.124(f)); and
Robert StackRobert StackChair
Kathleen JostKathleen JostIndustry Representative
James SamantaJames SamantaIndustry Representative
On January 1, 2023, the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Mutual Fund Dealers Association of Canada (the “MFDA”) were consolidated into a single self-regulatory organization recognized under applicable securities legislation. The New Self-Regulatory Organization of Canada (referred to herein as the “Corporation”) adopted interim rules that incorporate the pre-amalgamation regulatory requirements contained in the rules and policies of IIROC and the by-law, rules and policies of the MFDA (the “Interim Rules”). The Interim Rules include (i) the Investment Dealer and Partially Consolidated Rules, (ii) the UMIR and (iii) the Mutual Fund Dealer Rules. These rules are largely based on the rules of IIROC and certain by-laws, rules and policies of the MFDA that were in force immediately prior to amalgamation. Where the rules of IIROC and the by-laws, rules and policies of the MFDA that were in force immediately prior to amalgamation have been incorporated into the Interim Rules, Enforcement Staff have referenced the relevant section of the Interim Rules. Pursuant to Mutual Fund Dealer Rule 1A and s.14.6 of By-Law No.1 of the Corporation, contraventions of former MFDA regulatory requirements may be enforced by the Corporation.