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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

Re: Raymond John Zamrykut

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Prairie Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) in the hearing room at the MFDA offices, 800 – 6th Avenue SW, Suite 850, Calgary, Alberta on June 27, 2019 at 10:00 a.m. (Mountain), or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Raymond John Zamrykut (“Respondent”). The Hearing on the Merits will take place in Winnipeg, Manitoba.

  • Michelle Pong
    Michelle Pong
    Director, Regional Councils

    Mutual Fund Dealers Association of Canada
    121 King St. West, Suite 1000
    Toronto, ON M5H 3T9
    Telephone: 416-945-5134
    Fax: 416-361-9781
    E-mail: [email protected]

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

Allegation #1: In May 2014, the Respondent borrowed a total of $3,100 from two clients, thereby engaging in conduct giving rise to a conflict or potential conflict of interest which the Respondent failed to disclose to the Member, or failed to address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures of the Member and MFDA Rules 1.1.2, 2.1.4, 2.1.1, and 2.5.1.

Allegation #2: Between October 2016 and January 2018, the Respondent failed to report to the Member an outstanding garnishment order against the Respondent, contrary to the policies and procedures of the Member, subsection 4.1(h) of MFDA Policy No. 6, and MFDA Rules 1.1.2, 2.1.1 and 2.5.1.

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. From September 2012 to February 2018, the Respondent was registered in Manitoba as a mutual fund salesperson (now known as a dealing representative) with PFSL Investments Canada Ltd. (the “Member”), a Member of the MFDA.
  2. On February 7, 2018, the Member terminated the Respondent’s registration, and the Respondent is not currently registered in the securities industry in any capacity.
  3. At all material times, the Respondent conducted business in the Winnipeg, Manitoba area.

Allegation #1 – Personal Financial Dealings with Clients

  1. At all material times, the Member’s policies and procedures prohibited its Approved Persons from borrowing money from clients.
  2. At all material times, clients RN and SM were clients of the Member whose accounts were serviced by the Respondent.
  3. In May 2014, the Respondent borrowed $2,000 from client RN and $1,100 from client SM. The Respondent told the clients that he would repay them with interest within one year.
  4. The Respondent did not disclose to the Member that he had received monies from clients RN and SM.
  5. Clients RN and SM made repeated requests to the Respondent to repay the amounts owing.
  6. The Respondent repaid only a total of $200 of the $3,100 that he had borrowed from clients RN and SM.
  7. The Member compensated clients RN and SM a total of $2,900 for their loss.
  8. By virtue of the foregoing, the Respondent engaged in conduct giving rise to a conflict or potential conflict of interest which the Respondent failed to disclose to the Member, or failed to address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the policies and procedures of the Member and MFDA Rules 1.1.2, 2.1.4, 2.1.1, and 2.5.1.

Allegation #2 – Failure to Report a Garnishment

  1. At all material times, the Member’s policies and procedures required its Approved Persons to report any material changes to their information on the National Registration Database, including any garnishments outstanding or rendered against them in any civil court in Canada.
  2. On October 14, 2016, a party commenced a small claims court action against the Respondent for $5,159.19 at the Manitoba Provincial Court. On April 28, 2017, a Notice of Garnishment was issued in respect of the small claims court action against the Respondent indicating that he owed $6,317.63.
  3. The Respondent did not report to the Member that he was a defendant in the small claims court action, or that there was a garnishment against him, as described above.
  4. By failing to report to the Member an outstanding garnishment order against the Respondent, the Respondent engaged in misconduct contrary to the policies and procedures of the Member, subsection 4.1(h) of MFDA Policy No. 6, and MFDA Rules 1.1.2, 2.1.1 and 2.5.1.

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
800- 6 Ave S.W., Suite 850
Calgary, AB T2P 3G3
Attention: Sakeb Nazim
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 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 [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.

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