WHEREAS on February 1, 2023, the New Self-Regulatory Organization of Canada (the “Corporation”) issued a Notice of Settlement Hearing pursuant to Mutual Fund Dealer Rule 7.4.4 that was published on March 13, 2023 in respect of a disciplinary proceeding commenced against Megan Lynn Stokes (the “Respondent”);
AND WHEREAS the Respondent entered into a settlement agreement with Staff of the Corporation (“Staff”) dated February 7, 2023 (the “Settlement Agreement”), in which the Respondent agreed to a proposed settlement of matters for which the Respondent could be disciplined pursuant to Mutual Fund Dealer Rules 7.3 and 7.4.1;
AND WHEREAS on March 20, 2023, the Corporation published notice to the public that the Settlement Hearing that was originally scheduled to take place on March 22, 2023 was rescheduled to proceed on March 23, 2023;
AND WHEREAS based upon the admissions of the Respondent in the Settlement Agreement, the Hearing Panel is of the opinion that between June 2019 and January 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 interfering with the Dealer Member’s supervision of the Respondent and impacted its ability to communicate with clients, contrary to 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 shall pay a fine of $7,500 in certified funds on the date of this Order, pursuant to Mutual Fund Dealer Rule 22.214.171.124(b));
- The Respondent shall pay costs in the amount of $5,000 in certified funds on the date of this Order, pursuant to Mutual Fund Dealer Rule 7.4.2;
- The Respondent is suspended from acting as a branch manager or in any supervisory capacity for a Dealer Member that is registered as a mutual fund dealer (formerly Members of the MFDA) for a period of two months, commencing on the date of this Order pursuant to Mutual Fund Dealer Rule 126.96.36.199(f);
- The Respondent shall successfully complete an industry course that is acceptable to Staff of the Corporation within 12 months of the date of this Order, pursuant to Mutual Fund Dealer Rule 188.8.131.52(f));
- The Respondent shall in the future comply with Mutual Fund Dealer Rules 2.1.1 and 2.1.4(2); and
Paul M. MoorePaul M. MooreChair
Brigitte J. GeislerBrigitte J. GeislerIndustry Representative
Kenneth MannKenneth MannIndustry 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.