MFDA Notice of Hearing

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201811

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

Allan Douglas Rombough

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Central Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) in the hearing room at the MFDA offices, located at 121 King Street West, Suite 1000, Toronto, Ontario on March 13, 2018 at 9:00 a.m. (Eastern), or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Allan Douglas Rombough (“Respondent”).

DATED: Jan 19, 2018

"Sarah Rickard"

Sarah Rickard

Director of Regional Councils

Mutual Fund Dealers Association of Canada
121 King St. West, Suite 1000
Toronto, ON M5H 3T9
Telephone: 416-943-5143
Fax: 416-361-9781
E-mail: corporatesecretary@mfda.ca



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

Allegation #1: Between February 2009 and April 2014, the Respondent photocopied signature pages from Know-Your-Client forms that had been signed by clients and re-used the signature pages to complete 24 additional Know-Your-Client forms in respect of nine clients, contrary to MFDA Rule 2.1.1.

Allegation #2: Between April 2007 and February 2012, the Respondent obtained, possessed, and in four instances, submitted to the Member for processing, six pre-signed account forms in respect of four clients, contrary to MFDA Rule 2.1.1.

Allegation #3: Commencing in about September 2016, the Respondent failed to cooperate with MFDA Staff during the course of an investigation into his conduct, contrary to section 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 in the securities industry commencing in 1994.
  1. From 2004 to June 2016, the Respondent was registered in Ontario as a mutual fund salesperson (now known as a dealing representative) with Olympian Financial Inc. (“Olympian”), a Member of the MFDA.
  1. On June 9, 2016, the Respondent was terminated as a result of the matters described herein, and he is not currently registered in the securities industry in any capacity.
  1. At all material times, the Respondent conducted business in the Toronto, Ontario area.

Allegation #1 – Falsified Client Signatures

  1. Between February 2009 and April 2014, the Respondent photocopied signature pages from Know-Your-Client forms that had been signed by clients and re-used the signature pages to complete 24 additional Know-Your-Client forms (the “KYC Forms”) in respect of nine clients.
  1. The Respondent submitted all of the KYC Forms to Olympian for processing.
  1. By virtue of the foregoing, the Respondent engaged in conduct contrary to MFDA Rule 2.1.1.

Allegation #2 – Pre-Signed Account Forms

  1. At all material times, Olympian’s policies and procedures have prohibited its Approved Persons from using pre-signed account forms.
  1. Between April 2007 and February 2012, the Respondent obtained, possessed, and in four instances, submitted to Olympian for processing, 6 pre-signed account forms in respect of four clients.
  1. The pre-signed account forms consisted of four Switch/Redemption forms and two Know-Your-Client forms.
  1. By virtue of the foregoing, the Respondent engaged in conduct contrary to MFDA Rule 2.1.1. 

Allegation #3 – Failure to Cooperate

  1. In addition to the misconduct described above, commencing in about September 2016, the Respondent failed to cooperate with Staff’s investigation into his misconduct. As set out in the table below, Staff has made a number of requests to the Respondent to provide information and to attend an interview with Staff. The Respondent failed to provide the requested information in a timely manner and failed to attend an interview.

 

Date

Communication

Method of Delivery

Result

8/26/2016

Staff sent a letter requesting, among other things, that the Respondent provide a written statement concerning each of the forms described above.  Staff requested that the Respondent provide his written statement in a chart (the “Chart”) that was enclosed with the letter.  Response requested by September 19, 2016.

Registered and regular mail

The Respondent did not respond by September 19, 2016.

9/23/2016

Staff sent a letter requesting that the Respondent respond to Staff’s requests in the August 26, 2016 letter, including the request to complete the Chart.  Response requested by October 7, 2016.

Registered and regular mail

On October 5, 2016, the Respondent sent an email to Staff stating, among other things, that he “can neither confirm nor deny existing allegations” and that the “reasoning behind this copying of signatures was mostly a matter of expediency.” 

The Respondent did not complete the Chart.

10/24/2016

Staff requested that the Respondent complete the Chart.  Response requested by November 3, 2016.

Email

The Respondent did not respond by November 3, 2016.

11/7/2016

Staff sent a letter again requesting that the Respondent complete the Chart.  Response requested by November 17, 2016.

Registered and regular mail

On November 10, 2016, the Respondent sent an email to Staff to which he attached the Chart.

For each form on the Chart, the Respondent stated that he “Cannot confirm or deny” the allegations.

1/23/2017

Staff sent a letter advising the Respondent that he was required to attend an interview with Staff on February 21, 2017, and was required to confirm by February 7, 2017 that he would attend the interview.

Personal service

On February 8, 2017, the Respondent sent an email to Staff stating that he would not attend the interview.

2/9/2017

Staff again advised the Respondent that he was required to attend an interview with Staff on February 21, 2017.

Staff also advised the Respondent that he was required to confirm by February 15, 2017 that he had reconsidered his decision to not attend the interview.

Email

On February 15, 2017, the Respondent sent an email to Staff stating that he had not reconsidered his decision to not attend the interview.

2/16/2017

Staff advised the Respondent that he had “made it clear that [he had] no intention of cooperating with the investigation” and that Staff would “proceed accordingly.”

Email

The Respondent did not respond and he did not attend the interview on February 21, 2017.

 

  1. The Respondent has not communicated with Staff since he advised Staff on February 15, 2017 that he had not reconsidered his decision to not attend the interview scheduled for February 21, 2017.
  1. As a result of the Respondent’s failure to cooperate with Staff’s investigation, Staff has been unable to determine the full nature and extent of the Respondent’s conduct including whether the Respondent had discussed the information on the KYC Forms described above with the clients prior to submitting the KYC Forms to Olympian for processing.
  1. 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: pblasiak@mfda.ca

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 Director of Regional Councils permits otherwise; or
  3. transmitting one (1) electronic copy of the Reply to the Office of the Corporate Secretary by e-mail at CorporateSecretary@mfda.ca.

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.

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