Notice of Hearing

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

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 March 1994 to July 27, 2018, the Respondent was registered as a mutual fund salesperson (now known as a dealing representative^[1]).
2. From September 16, 2011 to July 27, 2018, the Respondent was registered in British Columbia as a dealing representative with Investia Financial Services Inc. (the “Member”), a Member of the MFDA.
3. Prior to September 2011, the Respondent was registered with other mutual funds dealers.
4. From August 2004 to June 2005, May 2007 to July 2007, and September 2009 to September 2011, the Respondent was registered as a branch manager. From July 1998 to March 2005, and May 2007 to October 2008, the Respondent was registered as a compliance officer.^[2]
5. The Respondent resigned from the Member on July 26, 2018. The Respondent is not currently registered in the securities industry in any capacity.
6. At all material times, the Respondent carried on business in the Vancouver, British Columbia area.

Allegation #1 – Altered Account Forms

7. At all material times, the Member’s policies and procedures required its Approved Persons to obtain client initials on any changes made to a client’s account forms, and prohibited the use of liquid correction fluid or white out on account forms.
8. Between April 2012 and May 2017, the Respondent altered, and used to process transactions, 26 account forms in respect of 17 clients by altering information on the account forms without having the clients initial the alterations.
9. The altered account forms consisted of Registered Education Savings Plan account opening forms, Trade Instruction forms, Know-Your-Client Update forms and Withdrawal of Assets from a Registered Plan Disclosure forms.
10. The alterations to the account forms included changes to investment instructions, Know-Your-Client information and the date of the client’s signature.
11. By virtue of the foregoing, the Respondent failed to observe high standards of ethics and conduct in the transaction of business, engaged in conduct unbecoming an Approved Person and detrimental to the public interest, contrary to MFDA Rule 2.1.1. The Respondent also engaged in conduct contrary to the Member’s policies and procedures, and MFDA Rules 1.1.2 and 2.5.

Allegation #2 – Pre-Signed Account Forms

12. At all material times, the Member’s policies and procedures prohibited its Approved Persons from holding or using pre-signed account forms, and from pre-populating the date fields for clients’ signatures. A pre-signed form was defined as any form signed by a client at a time when it was only partially completed.
13. Between January 2012 and January 2016, the Respondent obtained, possessed, and used to process transactions, 12 pre-signed account forms in respect of six clients.
14. The pre-signed account forms consisted of Dual Occupation Disclosure forms, Registered Education Savings Plan Redemption forms, New Account Application forms, Trade Ticket forms, Know-Your-Client Update forms, and Withdrawal of Assets from a Registered Plan Disclosure forms.
15. By virtue of the foregoing, the Respondent failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person and detrimental to the public interest, contrary to MFDA Rule 2.1.1. The Respondent also engaged in conduct contrary to the Member’s policies and procedures, and MFDA Rules 1.1.2 and 2.5.

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
Prairie Regional Office
Suite 850, 800 – 6 Ave SW
Calgary, AB T2P 3G3
Attention: Sakeb Nazim
Email: [email protected]

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 [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. [1] On September 28, 2009, as a result of the implementation of National Instrument 31-103, the mutual fund salesperson registration category was changed to “dealing representative – mutual fund dealer”.
2. [2] From May 10, 2007 to July 10, 2007, the Respondent was registered as Chief Compliance Officer.