Notice of Hearing

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 has been registered as a mutual fund salesperson (now known as dealing representative) with Investors Group Financial Services Inc. (“IG”), a Member of the MFDA, in Ontario since November 7, 2001 and in Quebec since November 23, 2005. He was also registered as a Regional Director and Branch Manager of IG from July 2008 to October 2014.

2. At all material times, the Respondent conducted business in the Ottawa, Ontario area.

Facilitating Registerable Activities by an Unregistered Individual

3. In or about February 2014, the Respondent was approached by an individual, SL, to sign two New Client Account Applications (“NCAFs”) and open two client accounts at IG using the Respondent’s representative code.[1]

4. At the time he approached the Respondent, SL had applied to become registered as a mutual fund salesperson with IG.[2] However the Respondent was aware that SL was not registered with IG. SL did not become registered with IG until March 6, 2014.

5. The Respondent agreed to assist SL to open accounts at IG for the two clients and to become the advisor of record in respect of the accounts. The Respondent further agreed that he would transfer the accounts to SL once SL became registered with IG.

6. On February 27 and 28, 2014, SL provided the Respondent with two completed NCAFs which had been signed by the two clients.[3] The Respondent signed the two NCAFs as the advisor of record using his IG representative code, without having met the clients, obtaining any instructions from the clients, or otherwise performing due diligence to learn the essential facts relative to the clients.

7. In signing the NCAFs, the Respondent attested that he had met the clients and verified the clients’ identities.

8. The Respondent or SL submitted the NCAFs to IG, which opened accounts for the two clients. The clients transferred investments held at another Member into these accounts.

9. By engaging in the conduct described above, the Respondent assisted an unregistered individual to open two client accounts at the Member without having met the clients or otherwise performing the necessary due diligence to learn the essential facts relative to the clients, thereby engaging on conduct contrary to MFDA Rules 1.1.1, 2.2.1 and 2.1.1.

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:

1. a reprimand;
2. a fine not exceeding the greater of:
   1. $5,000,000.00 per offence; and
   2. an amount equal to three times the profit obtained or loss avoided by such person as a result of committing the violation;
3. 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;
4. revocation of the authority of such person to conduct securities related business;
5. prohibition of the authority of the person to conduct securities related business in any capacity for any period of time;
6. 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, ON M5H 3T9
Attention: Paul Blasiak
Fax:  416-361-9073
Email: [email protected]

A Reply shall be filed by:

1. providing four (4) copies of the Reply to the Office of the Corporate Secretary by personal delivery, mail or courier to:
   1. The Mutual Fund Dealers Association of Canada
      121 King Street West, Suite 1000
      Toronto, ON M5H 3T9
      Attention: Office of the Corporate Secretary; or
2. transmitting one (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
3. transmitting one (1) electronic copy of the Reply to the Office of the Corporate Secretary by e-mail at [email protected].

A Reply may either:

1. 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
2. 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:

1. to serve and file a Reply; or
2. attend at the hearing specified in the Notice of Hearing, notwithstanding that a Reply may have been served,

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.

1. [1] SL is the subject of a related MFDA regulatory proceeding.
2. [2] SL applied to become registered with IG in September 2013.
3. [3] All information on the NCAFs, including the clients’ investment knowledge, investment objectives, time horizon and risk tolerance, was obtained and imputed by SL alone, without the Respondent’s knowledge or assistance.