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MFDA Notice of Hearing

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HomeCurrent Hearings201941 - Tamar Michelle Eisenberg › NOH201941

201941

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

Tamar Michelle Eisenberg

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 S.W., Suite 850, Calgary, Alberta on August 9, 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 Tamar Michelle Eisenberg (“Respondent”). The Hearing on the Merits will take place in Calgary, Alberta.

DATED: Jun 7, 2019

"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: 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: In or around February 2009, the Respondent engaged in securities related business that was not carried on for the account, or through the facilities of the Member by recommending, referring, or facilitating the sale of shares totaling $40,000 in a mortgage investment corporation to one client, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 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. Since June 1999, the Respondent has been registered as a mutual fund salesperson (now known as a dealing representative).
  2. From June 2006 to May 2009, the Respondent was registered in Alberta as a dealing representative with Desjardins Financial Security Investments Inc. (“Desjardins”), a Member of the MFDA. The Respondent resigned from Desjardins in May 2009.
  3. Since June 2009, the Respondent has been registered in Alberta as a dealing representative with Portfolio Strategies Corporation, a Member of the MFDA.
  4. At all material times, the Respondent carried on business in the Calgary, Alberta area.

Allegation #1 - Securities Related Business Outside the Member

  1. At all material times, Desjardins’ policies and procedures required its Approved Persons to only engage in securities related business through Desjardins.
  2. Commencing March 2009, TG became a client of Desjardins whose account was serviced by the Respondent.
  3. In or around February 2009, prior to TG becoming a client of Desjardins, TG advised the Respondent that she wished to invest $40,000 in a low-risk investment that she could redeem within short notice in order to use the monies invested towards a down payment on the purchase of a house.
  4. In or around February 2009, without Desjardins’ prior knowledge or approval, the Respondent recommended to TG that she invest in CareVest Blended Mortgage Investment Corporation (“CareVest”).
  5. The Respondent recommended that TG purchase the shares in CareVest based on the Respondent’s understanding that TG needed to be able to redeem the monies invested on short notice in order to purchase a house.
  6. In or around February 2009, the Respondent obtained from CareVest and provided to TG the marketing materials for the investment in CareVest shares. The Respondent also completed the subscription agreement for TG to enter into this investment.
  7. In or around February 2009, pursuant to the Respondent’s recommendation, TG purchased CareVest First Preferred Shares (“CareVest shares”) worth $40,000.
  8. TG’s purchase of CareVest shares was not carried on for the account or through the facilities of Desjardins.
  9. In March 2009, TG became a client of Desjardins.
  10. In or around December 2012, CareVest underwent corporate restructuring and the CareVest shares were amalgamated with other CareVest products and reclassified as CareVest Mortgage Investment Corporation (“CareVest MIC”) Class A shares.
  11. Since then, the ability of shareholders to retract their shares in CareVest MIC has become subject to certain limits. In general, shareholders are entitled to request that CareVest retract their shares once every twelve months at a specific time, and there are limits on the amount of shares that can be retracted.
  12. In 2013, TG wished to purchase a house, and was unable to redeem her CareVest MIC shares at that time. As a result, TG was not able to use the monies invested to make a down payment towards the purchase of a house.
  13. In June 2017, TG complained about the Respondent’s recommendation that she invest in CareVest, and indicated that, as of May 31, 2017, she was only able to redeem approximately $14,042 of her original investment of $40,000. As of May 2019, TG has redeemed $20,829. The remaining of TG’s shares are subject to the restrictions described above in paragraph 15.
  14. By virtue of the foregoing, the Respondent engaged in securities related business that was not carried on for the account, or through the facilities of the Member, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 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; 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
Suite 850, 800 – 6 Ave SW
Calgary, AB T2P 3G3
Attention: Sakeb Nazim
Email: snazim@mfda.ca

A Reply shall be filed by:

  1. providing four 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 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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