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. From November 2013 to October 2014, the Respondent was registered in Ontario as a dealing representative with Investors Group Financial Services Inc. (“Investors Group”), a Member of the MFDA.

2. On October 28, 2014, the Respondent resigned from Investors group and is not currently registered in the securities industry.

3. At all material times, the Respondent conducted business in the Toronto, Ontario area.

Background

MM

4. On October 27, 2014, MM attended at the Respondent’s branch office and asked to speak to the Respondent. MM informed the Respondent’s Regional Director that he was a client of the Respondent but not a client of Investors Group. MM declined to provide further information about his dealings with the Respondent. The Respondent’s Regional Director advised MM that the Respondent was not present at the branch office.

5. On October 28, 2014, the Respondent’s Division Director met with the Respondent to discuss MM’s attendance at the branch office and the nature of his activities relating to MM. During the meeting, the Respondent resigned from Investors Group.

6. At no time did the Respondent seek, or obtain, approval from Investors Group to engage in any dual occupations outside of Investors Group.

7. On November 3, 2014, Investors Group reported to the MFDA that the Respondent may have engaged in an undisclosed dual occupation involving MM.

BM

8. In November 2014, BM contacted Investors Group and advised staff of Investors Group that he had paid $10,600 to the Respondent to obtain a mortgage on his behalf. BM advised Investors Group that he had paid these monies to the Respondent in cash.

9. BM was not a client of Investors Group and the Respondent did not submit a mortgage application to Investors Group on behalf of BM.

10. At no time did the Respondent seek, or obtain, approval from Investors Group to engage in any dual occupations relating to mortgages.

11. On November 17, 2014, Investors Group reported to the MFDA that the Respondent may have engaged in an undisclosed dual occupation involving BM.

12. On December 3, 2014, BM advised staff of Investors Group that he was unable to locate the Respondent and that the Respondent had failed to process the requested mortgage and had not repaid BM.

Clients AZ and OF

13. Prior to his resignation from Investors Group, the Respondent was responsible for servicing the accounts of clients AZ and OF.

14. In December 2014, following the Respondent’s resignation, clients AZ and OF advised Investors Group that, among other things:
    1. the clients had loaned monies to the Respondent for an investment;
    2. the Respondent had failed to pay them the interest that was due on the loan;
    3. the Respondent falsely represented that he was a Chartered Financial Analyst; and
    4. the clients were unable to locate the Respondent.

15. On December 8, 2014, Investors Group reported the Respondent’s alleged conduct to the MFDA.

Approved Person RJ

16. At all material times, RJ was an Approved Person registered with Investors Group and conducted business at the Respondent’s branch office.

17. On March 31, 2015, RJ advised Investors Group in a written statement that, between June and August 2014, she had provided $36,000 to the Respondent to invest on her behalf after the Respondent informed her that he could generate investment returns of greater than 30% on the amount invested.

18. On April 1, 2015, Investors Group forwarded RJ’s written statement to the MFDA.

19. On August 26, 2015, RJ was interviewed by MFDA Staff (“Staff”). During the interview, RJ advised Staff that when she requested that the Respondent repay the monies that she had provided to him, the Respondent provided her with a cheque in the amount of $36,000 that was subsequently returned to RJ by the bank due to their being non-sufficient funds in the bank account from which the cheque had been drawn.

Allegation #1 – Failure to Cooperate

20. Commencing in January 2015, the Respondent failed to cooperate with Staff’s investigation into the matters described above. As set out in the chart below, Staff has made a number of attempts to contact the Respondent to obtain a written statement and documents, and the Respondent has failed to provide the requested information.

21. Since January 13, 2015, the Respondent has not communicated with Staff.

22. The Respondent had not provided Staff with the information it requested or attended an interview with Staff in accordance with his obligations.

23. As a result of the Respondent’s failure to cooperate with Staff’s investigation, Staff has been unable to determine the full extent of his conduct with respect to BM, RJ and clients AZ and OF, including whether the Respondent misappropriated monies.

24. By virtue of the foregoing, the Respondent failed to cooperate with Staff’s investigation into his conduct, contrary to section 22.1 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:

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