November 24, 2022 (Toronto, Ontario) – A settlement hearing in the matter of Wealthsimple Advisor Services Inc. (the “Respondent”) was held electronically by videoconference on November 23, 2022 in Toronto, Ontario before a three-member Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”).
The Hearing Panel accepted the settlement agreement dated October 31, 2022 (the “Settlement Agreement”), between Staff of the MFDA and the Respondent as a consequence of which the following sanctions were imposed on the Respondent:
- a fine in the amount of $100,000; and
- costs in the amount of $20,000.
In the Settlement Agreement, the Respondent admitted that:
- between February 2019 and August 2019, it 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 it, 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
- between April 1, 2019 and May 27, 2019, it 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.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 76,695 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA’s complaint and enforcement processes, as well as links to ‘Check an Advisor’ and other Investor Tools, visit the For Investors page on the MFDA website.