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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: Mark Richard Wagner

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Pacific Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) in the hearing room at the MFDA offices, 650 West Georgia Street, Suite 1220, Vancouver, British Columbia on August 28, 2019 at 10:00 a.m. (Pacific), or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Mark Richard Wagner (the “Respondent”).

  • 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: Between October 2010 and December 2016, the Respondent altered and, in some instances, used to process transactions, 11 account forms in respect of 7 clients by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1.

Allegation #2: Between September 2013 and November 2015, the Respondent obtained, possessed, and in some instances, used to process transactions, 8 pre-signed account forms in respect of 7 clients, contrary to MFDA Rule 2.1.1.

Allegation #3: In April 2013, the Respondent submitted 2 Limited Trading Authorization forms to the Member for processing with respect to 2 clients on which he falsely indicated that he had witnessed the clients’ signatures, contrary to the Member’s policies and procedures, and MFDA Rules 2.5.1, 1.1.2, and 2.1.1.

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 as a mutual fund salesperson (now known as a dealing representative) with Sun Life Financial Investment Services (Canada) Inc.[1] (the “Member”), a Member of the MFDA, as follows:
    1. in Alberta from February 1998 until December 2015;
    2. in the Northwest Territories at various times until January 2007; and
    3. in British Columbia from February 2010 until December 2017.
  2. The Respondent resigned from the Member on December 31, 2017, and is not currently registered in the securities industry in any capacity.
  3. At all material times, the Respondent conducted business in the Kelowna, British Columbia area.

Allegation #1: Altered Account Forms

  1. Between October 2010 and December 2016, the Respondent altered 11 account forms in respect of 7 clients by altering information on the account forms without having the clients initial the alterations.
  2. The altered account forms consisted of:
    1. 1 new account application form;
    2. 6 Know Your Client (“KYC”) forms;
    3. 1 order ticket;
    4. 1 pre-authorized chequing form;
    5. 1 private client account linking form; and
    6. 1 transfer authorization form.
  3. The alterations the Respondent made to the account forms included alterations to client signature dates, account investment objectives and risk tolerances, trade amounts, and account numbers.
  4. In 8 instances, the Respondent submitted the altered forms to the Member for processing.
  5. By altering account forms as described above, the Respondent failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.

Allegation #2: Pre-Signed Account Forms

  1. At all material times, the Member’s policies and procedures prohibited its Approved Persons from obtaining, holding, or using pre-signed account forms.
  2. Between September 2013 and November 2015, the Respondent obtained, possessed, and in 5 instances, used to process transactions, 8 pre-signed account forms in respect of 7 clients.
  3. The pre-signed account forms consisted of:
    1. 2 locking-in agreement forms;
    2. 1 automatic rebalanced service form;
    3. 1 KYC form;
    4. 2 order tickets;
    5. 1 pre-authorized chequing form; and
    6. 1 signature for electronic application form.
  4. By obtaining and using pre-signed account forms as described above, the Respondent failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.

Allegation #3: Failure to Witness Signatures for Limited Trading Authorization Forms

  1. At all material times, Sun Life’s policies and procedures required that its Approved Persons meet face to face with a client to witness a client’s signature on Limited Trading Authorization (“LTA”) forms.
  2. In April 2013, the Respondent submitted 2 LTA forms to the Member for processing with respect to 2 clients on which he falsely indicated that he had witnessed the clients’ signature on the forms, without having met the clients in person to witness their signatures.
  3. By virtue of the foregoing, the Respondent failed to comply with the Member’s policies and procedures, and failed to observe high standards of ethics and conduct in the transaction of business and engaged in conduct unbecoming an Approved Person, contrary to MFDA Rules 2.5.1, 1.1.2, and 2.1.1.

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
Prairie Regional Office
Suite 850, 800 – 6th Ave SW
Calgary, AB T2P 3G3
Attention: Justin Dunphy
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] Commencing February 1998, the Respondent was registered as a mutual fund salesperson with Clarica Investco Inc. In June 2007, Clarica Investco Inc. underwent a name change to Sun Life Financial Investment Services (Canada) Inc.

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