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Notice of Hearing

IN THE MATTER OF A DISCIPLINARY HEARING PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re:

Notice of Hearing
File No. 201368



IN THE MATTER OF A DISCIPLINARY HEARING
PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Christopher Raymond Phillips




NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a
hearing panel (the “Hearing Panel”) of the Atlantic Regional Council of the Mutual Fund Dealers
Association of Canada (the “MFDA”) on November 19, 2014 at 10:00 a.m. (Atlantic) concerning
a disciplinary proceeding commenced by the MFDA against Christopher Raymond Phillips (the
“Respondent”). Members of the public who would like to listen to the teleconference should
contact the Manager, Hearings Administration at 416-945-5146 or [email protected] to
obtain particulars. The Hearing on the Merits will take place in Fredericton, New Brunswick at a
time and venue to be announced.

DATED
this 6th day of October, 2014.

“Paige Ward”

Paige Ward

Corporate Secretary

Mutual Fund Dealers Association of Canada
121 King Street West, Suite 1000
Toronto, Ontario, M5H 3T9
Telephone: 416-943-5838
Facsimile: 416-361-9781
Email: [email protected]
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NOTICE is further given that the MFDA alleges the following violations of the By-laws, Rules
or Policies of the MFDA:

Allegation #1: Commencing in August 2013, the Respondent has failed or refused to attend for
an interview requested by MFDA Staff for the purpose of investigating the Respondent’s
conduct, contrary to s. 22.1 of MFDA By-law No. 1.

PARTICULARS

NOTICE is further given that the following is a summary of the facts alleged and intended to be
relied upon by the MFDA at the hearing:

Registration History

1.
The Respondent was registered as a mutual fund salesperson in New Brunswick with
Investia Financial Services Inc. (“Investia”) between September 12, 2011 and October 20, 2011,
at which time he voluntarily resigned.

2.
Prior to Investia, the Respondent was registered as a mutual fund salesperson with
Manulife Securities Investment Inc. (“Manulife”) from July 2008 to July 2011, and with
Berkshire Investment Group Inc. (“Berkshire”) from September 2005 to July 2008.1.

3.
The Respondent is currently not registered in the securities industry in any capacity.

4.
At all material times, the Respondent conducted business in the Nackawic, New
Brunswick area.

1 On July 2, 2008, Berkshire and Manulife amalgamated, and continued under the name Manulife.

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Allegation #1 – Failure to Cooperate

Background

5.
The matter came to the attention of MFDA Staff in October 2011 upon receipt of a
Member Event Tracking System (METS) filing by Manulife, and information provided by the
New Brunswick Securities Commission (“NBSC”), indicating that the NBSC was reviewing a
complaint against the Respondent alleging that he conducted personal financial dealings with a
client.

6.
In addition, the NBSC was investigating the Respondent’s life partner, WP, who was not
registered in the securities industry. The investigation pertained to complaints received of
possible violations of the New Brunswick Securities Act.

7.
A proceeding before the NBSC was commenced against WP, and on July 5, 2013, a
Hearing Panel of the NBSC found that WP solicited and obtained a total of $858,782.82 from 11
investors based on promises to invest the funds on their behalf and high returns. Each investor
provided WP, or a corporation controlled by him, with monies to invest in exchange for a
promissory note in respect to the investment. WP never invested any of the investors’ monies.
WP eventually was charged and pleaded guilty to nine counts of securities fraud, and was
sentenced by the New Brunswick Provincial Court to three-years on each count to be served
concurrently.

8.
During the course of the NBSC investigation, it issued a cease-trade order, which
prohibited WP, the Respondent, and various corporations, from soliciting money from anyone
for any investment related activity. The corporations listed in the cease trade order included two
companies for which the Respondent was listed as a director and officer: 613247 N.B. Ltd. (the
“Numbered Company”) and Centum Home Mortgage Corp. (“Centum”).

9.
The NBSC subsequently issued a Notice of Discontinuance against the Respondent,
613247 N.B. Ltd, Centum, and other companies.
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Centum and the Numbered Company

10.
Centum was incorporated in New Brunswick on January 24, 2004 and was dissolved on
October 25, 2012.

11.
The Numbered Company was incorporated in New Brunswick on June 25, 2004 and was
dissolved on March 31, 2009.

12.
As part of its investigation, MFDA Staff obtained various documents from the NBSC,
including loan documents that show that individuals, one of whom was a client of Manulife
whose accounts were serviced by the Respondent, purported to enter into loans with the
Numbered Company, as follows:

Investor
Client of Manulife
Date of transaction
Amount
WS and AS
N
June 26, 2008
$151,869.13
SF
Y
November 19, 2009
$70,000
SF
Y
September 23, 2008
$75,000

13.
In addition, documents provided by the NBSC show that the Respondent appears as a
guarantor on a loan agreement entered into personally by WP with SM and HM, who were non
clients, as follows:

Investor
Client of Manulife
Date of transaction
Amount
SM and HM
N
May 4, 2010
$50,000

14.
MFDA Staff has been unable to confirm the full details of the Respondent’s involvement
in Centum, or the Numbered Company due to the Respondent’s failure to cooperate with MFDA
Staff’s investigation, as described below. Further particulars will be provided if or when the
Respondent cooperates with MFDA Staff’s investigation.

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Failure to attend for an interview requested by Staff

15.
As is set out in the chart below, the Respondent has failed to fully cooperate with Staff’s
investigation into the matters alleged herein, notwithstanding that Staff has requested that the
Respondent attend for an interview with Staff:

Date
Content of letter
Method of delivery
Outcome
August 16,
Request for written
Regular and registered Response provided by the
2012
response to address
mail
Respondent on August
questions as part of
30, 2012
Staff’s investigation
February 11,
Interview request letter
Regular and registered Letters returned to the
2013
mail
MFDA indicating the
Respondent had moved
March 11,
Interview request letter
Regular and registered Letters returned to the
2013,
requesting that the
mail
MFDA indicating the
Respondent attend an
Respondent had moved
interview scheduled on
May 8, 2013
March 26,
Request that the
Attempted personal
Unsuccessful. Process
2013
Respondent attend an
service
server indicated that the
interview on May 8,
Respondent had moved
2013
August 23,
Request that the
Successful personal
No response
2013,
Respondent contact staff
service on WP at new
by September 9, 2013 to
residential address for
schedule an interview
the Respondent
obtained by Staff
September 11,
Interview request letter
Successful personal
On Sept 17, 2013, the
2013
service and registered
Respondent wrote Staff
and regular mail
and declined Staff’s
request for an interview

16.
To date, the Respondent has not attended for an interview despite Staff’s requests.

17.
Due to the Respondent’s failure to cooperate with Staff’s investigation, the full nature
and extent of the Respondent’s conduct in relation to his activities with the Numbered Company,
and Centum, is not fully known by Staff.

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18.
Commencing in August 2013, by failing to attend for an interview requested by Staff as
part of its investigation into the Respondent’s conduct, the Respondent has failed to cooperate
with an MFDA investigation, contrary to section 22 of MFDA By-law No. 1.

NOTICE is further given that the Respondent shall be entitled to appear and be heard and be
represented by counsel or agent at the hearing and to make submissions, present evidence and
call, examine and cross-examine witnesses.

NOTICE is further given that MFDA By-laws provide that if, in the opinion of the Hearing
Panel, the Respondent:

 has failed to carry out any agreement with the MFDA;

 has failed to comply with or carry out the provisions of any federal or provincial statute
relating to the business of the Member or of any regulation or policy made pursuant
thereto;

 has failed to comply with the provisions of any By-law, Rule or Policy of the MFDA;

 has engaged in any business conduct or practice which such Regional Council in its
discretion considers unbecoming or not in the public interest; or

 is otherwise not qualified whether by integrity, solvency, training or experience,

the Hearing Panel has the power to impose any one or more of the following penalties:

(a) a reprimand;

(b) a fine not exceeding the greater of:

(i)
$5,000,000.00 per offence; and
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(ii)
an amount equal to three times the profit obtained or loss avoided by such person
as a result of committing the violation;

(c) suspension of the authority of the person to conduct securities related business for such
specified period and upon such terms as the Hearing Panel may determine;

(d) revocation of the authority of such person to conduct securities related business;

(e) prohibition of the authority of the person to conduct securities related business in any
capacity for any period of time;

(f) such conditions of authority to conduct securities related business as may be considered
appropriate by the Hearing Panel;

NOTICE is further given that the Hearing Panel may, in its discretion, require that the
Respondent pay the whole or any portion of the costs of the proceedings before the Hearing
Panel and any investigation relating thereto.

NOTICE is further given that the Respondent must serve a Reply on Enforcement Counsel and
file a Reply with the Office of the Corporate Secretary within twenty (20) days from the date of
service of this Notice of Hearing.

A Reply shall be served upon Enforcement Counsel at:

Mutual Fund Dealers Association of Canada

121 King Street West, Suite 1000

Toronto, Ontario
M5H 3T9

Attention: David Halasz

Fax: 416-361-9073

Email: [email protected]

A Reply shall be filed by:
(a) providing 4 copies of the Reply to the Office of the Corporate Secretary by personal
delivery, mail or courier to:
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The Mutual Fund Dealers Association of Canada
121 King Street West, Suite 1000
Toronto, Ontario
M5H 3T9
Attention: Office of the Corporate Secretary; or

(b) transmitting 1 copy of the Reply to the Office of the Corporate Secretary by fax to fax
number 416-361-9781, provided that the Reply does not exceed 16 pages, inclusive of the
covering page, unless the Office of the Corporate Secretary permits otherwise; or
(c) transmitting 1 electronic copy of the Reply to the Office of the Corporate Secretary by e-
mail at [email protected].

A Reply may either:

(i)
specifically deny (with a summary of the facts alleged and intended to be relied upon
by the Respondent, and the conclusions drawn by the Respondent based on the
alleged facts) any or all of the facts alleged or the conclusions drawn by the MFDA in
the Notice of Hearing; or

(ii)
admit the facts alleged and conclusions drawn by the MFDA in the Notice of Hearing
and plead circumstances in mitigation of any penalty to be assessed.

NOTICE is further given that the Hearing Panel may accept as having been proven any facts
alleged or conclusions drawn by the MFDA in the Notice of Hearing that are not specifically
denied in the Reply.

NOTICE is further given that if the Respondent fails:

(a) to serve and file a Reply; or

(b) attend at the hearing specified in the Notice of Hearing, notwithstanding that a Reply
may have been served,

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the Hearing Panel may proceed with the hearing of the matter on the date and the time and place
set out in the Notice of Hearing (or on any subsequent date, at any time and place), without any
further notice to and in the absence of the Respondent, and the Hearing Panel may accept the
facts alleged or the conclusions drawn by the MFDA in the Notice of Hearing as having been
proven and may impose any of the penalties described in the By-Laws.

End.

DM 396836 v3

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