MFDA Notice of Hearing

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201884

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

Brian Arthur Greigson

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 October 9, 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 Brian Arthur Greigson (“Respondent”).

DATED: Jul 27, 2018

"Paige Ward"

Paige Ward

Corporate Secretary

Mutual Fund Dealers Association of Canada
121 King St. West, Suite 1000
Toronto, ON M5H 3T9
Telephone: 416-943-5838
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 January and March 2014, the Respondent referred two clients and one other individual to purchase $75,000 of syndicated mortgages outside the Member, and received $3,750 in referral fees outside the Member for doing so, thereby engaging in conduct contrary to MFDA Rules 1.1.1, 2.4.2 and 2.1.1, and the requirements of sections 13.7 and 13.8 of National Instrument 31-103.

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 became registered in the mutual fund industry in 1995.
  1. From November 2013 to October 2017, the Respondent was registered in Ontario as a dealing representative (formerly known as a mutual fund salesperson) with Excel Private Wealth Inc. (“Excel”), a Member of the MFDA.
  1. The Respondent is not currently registered in the securities industry in any capacity.
  1. At all material times, the Respondent conducted his mutual fund business in Kingston, Ontario.

Allegation #1 - Undisclosed Referral Agreement

  1. On December 16, 2013, the Respondent entered into a “Simple Referral Agent Agreement” with FMP Mortgage Investments Inc. (“FMP”) to refer investors to purchase syndicated mortgages issued by Fortress Real Capital (the “Referral Arrangement”). The Referral Arrangement provided that the Respondent would refer individuals to FMP in return for referral fees equal to 5% of the monies that the individuals referred by the Respondent invested in syndicated mortgage products. The Respondent entered into the Referral Arrangement without the knowledge or approval of Excel.
  1. Between January and March 2014, the Respondent referred three investors, of which two were Excel clients, to FMP. The three investors each purchased $25,000 of syndicated mortgages in a Fortress Project know as Harmony Village Sheppard Inc. (“Harmony”), a condominium development.
  1. In the course of referring the investors to FMP, the Respondent informed the investors of the opportunity to invest with FMP and provided brochures regarding FMP syndicated mortgage products to the three investors.
  1. Pursuant to the Referral Arrangement, FMP paid the Respondent $3,750 in referral fees. FMP paid the referral fees directly to the Respondent.
  1. On August 20, 2014, the Respondent disclosed to Excel that he had entered into the Referral Arrangement and that he had referred three investors, two of whom were clients, to FMP.
  1. Excel did not have a referral arrangement with FMP, did not record any of the referral fees on its books and records, and had no knowledge of the Referral Arrangement until notified by the Respondent.
  1. On January 20, 2017, Harmony was petitioned into Receivership. The project was eventually sold by the court appointed receiver to another developer, who completed the project.
  1. By referring two clients and one other individual to purchase $75,000 of syndicated mortgages outside the Member, and receiving $3,750 in referral fees outside the Member for doing so, the Respondent engaged in conduct contrary to MFDA Rules 1.1.1, 2.4.2 and 2.1.1, and the requirements of sections 13.7 and 13.8 of National Instrument 31-103.

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; and
  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: David Babin
Email: dbabin@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) 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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