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 2013 to March 2018, the Respondent was registered in Manitoba as a dealing representative (formerly known as a mutual fund salesperson) with TD Investment Services Inc. (the “Member”), a Member of the MFDA.
2. On March 5, 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 carried on business in the Winnipeg, Manitoba area.

Allegation #1 – Misappropriation

4. At all material times, the Respondent was employed by the Member and its affiliated bank, TD Canada Trust (“TD Canada Trust”). The Respondent serviced both Member clients and bank clients.
5. Between August 2015 and March 2018, the Respondent misappropriated approximately $659,232 from two mutual fund clients and 12 other individuals, all of whom held bank accounts at TD Canada Trust. The amounts misappropriated by the Respondent are particularized below:

6. The Respondent misappropriated the monies described above from bank accounts at TD Canada Trust by creating new bank accounts for TD Canada Trust clients without the knowledge or approval of the account holders (the “Fake Accounts”), and then transferring monies from the account holders’ existing bank accounts at the TD Canada Trust to the Fake Accounts. The Respondent subsequently used a bank card to access the monies in the Fake Accounts.
7. The Respondent used these monies he misappropriated for personal gambling.
8. The Respondent reimbursed six of the clients or other individuals by transferring $244,689.82 that he had misappropriated from other clients or individuals.
9. TD Canada Trust subsequently reimbursed the remaining account holders for their losses.
10. By engaging in the conduct described above, the Respondent failed to deal fairly, honestly and in good faith with the clients, failed to observe high standards of ethics and conduct in the transaction of business, engaged in business conduct which is unbecoming and detrimental to the public interest, and failed to be of such character and business repute as is consistent with the standard of conduct, contrary to MFDA Rule 2.1.1.

Allegation #2 – Failure to Cooperate

11. On March 21, 2018, Staff sent a letter to the Respondent requesting that the Respondent provide a written statement by April 10, 2018 with respect to the events described above. On April 10, 2018, the Respondent responded to Staff’s letter, but did not provide the information requested by Staff.
12. On May 31, 2018, Staff sent an email to the Respondent requesting written statements to various questions concerning his conduct. On June 6, 2018, the Respondent responded to Staff’s email, but did not provide the information that Staff had requested from him.
13. On September 11, 2018, Staff sent a registered letter to the Respondent requesting that he contact Staff within ten business days to schedule an interview. The letter was returned to Staff as unclaimed.
14. On October 9, 2018, Staff sent an email to the Respondent requesting that he contact Staff by October 22, 2018 to schedule an interview. Staff received “read receipt” indicating that the email was viewed on October 9, 2018. The Respondent did not respond to the October 9, 2018 email from Staff.
15. On October 26, 2018, Staff sent another registered letter and another email to the Respondent requesting that the Respondent contact Staff by November 9, 2018 to schedule an interview. The registered mail was signed for by the Respondent’s mother who resided at the Respondent’s residence. The Respondent did not respond to the letter and he did not respond to the October 26, 2018 email.
16. On November 19, 2018, Staff sent another registered letter and another email to the Respondent requesting that he contact Staff by November 26, 2018 to schedule an interview. The letter stated that if Staff received no response, Staff would conduct the interview on January 23, 2019. Staff also informed the Respondent in the November 19, 2018 letter, and in an email sent on November 29, 2018, that if the Respondent did not attend an interview with Staff to give information respecting matters under investigation in accordance with his obligations pursuant to s. 22.1(c) of MFDA By-law No. 1, Staff would commence enforcement proceedings against the Respondent as a consequence of his failure to co-operate with Staff’s investigation. The registered letter dated November 19, 2018 was signed for by the Respondent’s mother who resided at the Respondent’s residence. A second copy of the letter was also personally delivered to the Respondent’s mother by a process server on November 28, 2018.
17. The Respondent did not respond to Staff’s letters to schedule an interview and did not attend the interview scheduled for January 23, 2019.
18. The Respondent’s failure to cooperate frustrated Staff’s investigation into his conduct.
19. By virtue of the foregoing, the Respondent failed to cooperate with an investigation by Staff into his conduct, contrary to section 22.1 of MFDA By-Law No. 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: 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.