Order

WHEREAS on June 7, 2019, the Mutual Fund Dealers Association of Canada (the “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 John David Elwood (the “Respondent”);

AND WHEREAS the first appearance in this hearing was held by teleconference before a Chair of a hearing panel of the Central Regional Council of the MFDA (the “Hearing Panel”) on July 9, 2019 in accordance with s. 19.13(b) of MFDA By-law No. 1;

AND WHEREAS both Counsel for Staff of the MFDA (“Staff”) and an agent on behalf of the Respondent attended the first appearance by teleconference on July 9, 2019 to address scheduling and other procedural matters and jointly proposed a schedule for the continuation of the proceeding;

AND WHEREAS on October 24, 2019 and October 25, 2019 the hearing on the merits took place before the Hearing Panel;

AND WHEREAS on October 25, 2019, after hearing the evidence filed during the hearing on the merits, the Hearing Panel adjourned the matter to allow the parties to file written submissions and re-attend for oral argument;

AND WHEREAS on December 4, 2019, the hearing on the merits resumed and the parties re-attended for oral argument;

AND WHEREAS on the basis of the evidence and submissions presented during the hearing on the merits, the Hearing Panel found that the Respondent:

1. between September 2012 and April 2017, borrowed $16,000 from a client thereby engaging in personal financial dealings with the client that gave rise to an actual or potential conflict of interest that the Respondent failed to disclose to the Member or to the client in writing and failed to otherwise address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 1.1.2, and 2.1.1;
2. between September 2013 and January 2017, misled the Member by providing false responses to Member questionnaires, thereby interfering with the Member’s ability to supervise the Respondent, contrary to MFDA Rules 2.1.1 and 1.1.2; and

• between about February 2016 and April 2017, failed to report that he had been named a defendant in a civil claim related to borrowing money from a client, contrary to MFDA Rules 1.4(b) and 2.1.1 and section 4 of MFDA Policy No. 6.

AND WHEREAS on August 19, 2020, a penalty hearing took place before the Hearing Panel;

AND WHEREAS at the penalty hearing, Counsel for the Respondent and Counsel for Staff made submissions to the Hearing Panel regarding the proposed penalties and costs to be imposed in light of the findings of misconduct that had been made by the Hearing Panel;

IT IS HEREBY ORDERED THAT:

1. The Respondent is permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member, pursuant to s. 24.1.1(e) of MFDA By-law No. 1;
2. The Respondent shall pay a fine in the amount of $25,000, pursuant to s. 24.1.1(b) of MFDA By-law No. 1;
3. The Respondent shall pay costs in the amount of $12,500, pursuant to s. 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.