Notice of Hearing

NOTICE is further given that the MFDA alleges the following violations of the By-laws, Rules or Policies of the MFDA:

Allegation #1: Between October 2011 and August 2015, the Respondent obtained, possessed and, in some instances, used to process transactions, eight (8) pre-signed account forms in respect of five (5) clients, contrary to MFDA Rule 2.1.1.

Allegation #2: Between October 2011 and August 2015, the Respondent, acting in the capacity as branch manager, reviewed and approved the use of six (6) pre-signed account forms, contrary to MFDA Rules 2.5.5(f)[1] and 2.1.1.

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. Since 1997, the Respondent has been registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with PFSL Investments Canada Ltd. (“PFSL”), a Member of the MFDA.

2. Since December 2014, PFSL has designated the Respondent as a branch manager.

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

Pre-Signed Account Forms

4. At all material times, PFSL’s policies and procedures prohibited its Approved Persons, including the Respondent, from using pre-signed account forms.

5. Between October 2011 and August 2015, the Respondent obtained, possessed and, in some instances, used to process transactions, eight (8) pre-signed account forms in respect of five (5) clients.

6. The pre-signed account forms consisted of redemption request forms, know-your-client forms, and customer service forms.

7. By virtue of the foregoing, the Respondent failed to observe high standard of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.

Approval of Pre-Signed Account Forms

8. Between October 2011 and August 2015, the Respondent, acting in the capacity as branch manager, reviewed and approved the use of 5 of the pre-signed account forms described above in paragraph 5.

9. By virtue of the foregoing, the Respondent failed to fulfil his responsibilities as a branch manager, contrary to MFDA Rule 2.5.5(f) (see footnote 1), and failed to observe a high standard of conduct and ethics in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 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: Sarah Glickman

            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:

The Mutual Fund Dealers Association of Canada

121 King Street West, Suite 1000

Toronto, ON M5H 3T9

Attention: Office of the Corporate Secretary; or

b. 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

c. 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] Rule 2.5.5(f) has been re-numbered during the period of the Respondent’s conduct described in this Settlement Agreement. Prior to September 2013, the Respondent’s conduct was contrary to MFDA Rule 2.5.5(d).