June 10, 2020 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Rebecca Wai-Chiu Li (“Respondent”) by Notice of Hearing dated October 1, 2019.
The hearing of this matter on its merits was held on June 8, 2020 by electronic hearing in Toronto, Ontario before a three-member Hearing Panel of the MFDA’s Central Regional Council. After hearing submissions from Staff of the MFDA with respect to misconduct, the Hearing Panel found that the following allegations set out in the Notice of Hearing had been established. In particular, the Hearing Panel made the following findings of misconduct:
Allegation #1: Between July 2013 and November 2015, the Respondent engaged in securities related business that was not carried on for the account of the Member or conducted through its facilities by recommending, selling or facilitating the sale of syndicated mortgage investments to clients and other individuals, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 2.1.1, 2.5.1 and 1.1.2.
Allegation #2: Between July 2013 and November 2015, the Respondent engaged in an outside activity which was not disclosed to or approved by the Member, by recommending, selling, or facilitating the sale of syndicated mortgage investments to clients and other individuals, contrary to MFDA Rules 1.2.1(c) (now MFDA Rule 1.3), 2.1.1, 2.5.1 and 1.1.2.
Allegation #3: Between July 2013 and November 2015, the Respondent participated in an unapproved referral arrangement by making referrals in respect of the sale of syndicated mortgage investments to clients and other individuals, contrary to the Member’s policies and procedures, MFDA Rules 2.4.2, 2.1.1, 2.5.1 and 1.1.2, and the requirements of sections 13.7 to 13.10 of National Instrument 31-103.
Allegation #4: Between July 2013 and November 2016, the Respondent accepted or acted upon general powers of attorney in respect of five clients, and failed to inform the Member that she held these powers of attorney over the financial affairs of clients whose accounts she serviced, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4 and 2.1.1.
Allegation #5: Between June 2014 and May 2015, the Respondent engaged in personal financial dealings with clients by accepting cheques from clients payable to her and co-mingling client monies with her own monies by depositing the cheques in bank accounts that she could access or control, contrary to Member’s policies and procedures and MFDA Rules 3.3.1 and 3.3.2(a).
Allegation #6: Between October 2013 and August 2016, the Respondent provided false and misleading information in response to Member supervisory questionnaires, thereby misleading the Member and interfering with its ability to supervise the Respondent’s conduct, contrary to MFDA Rule 2.1.1.
Allegation #7: Between April 2017 and March 2018, the Respondent provided false or misleading information to Staff during its investigation of her conduct, contrary to MFDA Rule 2.1.1.
Allegation #8: Commencing no later than December 13, 2018, the Respondent failed to cooperate with Staff’s investigation of her conduct, contrary to section 22.1 of MFDA By-law No. 1.
The Hearing Panel advised that it will issue written reasons for its decision as to misconduct in due course. Submissions with respect to sanctions will take place by electronic hearing on June 26, 2020 at 10:00 a.m. (Eastern), or as soon thereafter as the matter can be heard. Members of the public who would like to participate should contact email@example.com to obtain particulars.
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 81,000 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.