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MFDA Notice of Hearing

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HomeCurrent Hearings202012 - Rajvir Kaur Hothi › NOH202012

This is a Third Party Document.

202012

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

Rajvir Kaur Hothi

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 April 9, 2020 at 10:30 a.m. (Mountain), or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Rajvir Kaur Hothi (“Respondent”). The Hearing on the Merits will take place in Edmonton, Alberta.

DATED: Feb 7, 2020

"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: Between October 25, 2017 and January 8, 2018, the Respondent misappropriated monies from two clients and two other individuals, contrary to MFDA Rule 2.1.1.

Allegation #2: Commencing in March 2018, the Respondent failed to cooperate with the MFDA’s investigation into her conduct, contrary to Section 22.1 of MFDA By-law No. 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 2008 to September 2015, and from December 20, 2016 to February 7, 2018, the Respondent was registered in Alberta as a mutual fund salesperson (now known as a dealing representative[1]) with TD Investment Services Inc. (the “Member”), a Member of the MFDA.
  2. At all material times, the Respondent was also designated as a Branch Manager with the Member.
  3. At all material times, the Respondent conducted business at a Member branch located in the Edmonton, Alberta area. The Respondent was also an employee of the bank branch of TD Canada Trust (the “Bank”) that is affiliated with the Member and which operated out of the same office location.
  4. On February 7, 2018, the Member terminated the Respondent’s mutual fund registration after discovering the conduct described below.
  5. The Respondent has not been registered in the securities industry in any capacity since she was terminated.

Allegation #1 – Misappropriation of Monies

  1. Between October 25, 2017 and January 8, 2018, the Respondent misappropriated approximately $27,557 from bank accounts at the Edmonton branch held by two clients and two other individuals, as described below:

Account Holder

Member Client?

Date  of Misappropriation

Amount Misappropriated

JL

No

October 25, 2017

$5,182.32

DH

Yes

November 22, 2017 to December 11, 2017

$1,000.00

AC Ltd

No

November 23, 2017 to January 5, 2018

$16,859.15

BQ

No

December 14, 2017

$2,515.12

CA

Yes

January 8, 2018

$2,000.00

Total Amount Misappropriated

$27,556.59

  1. In or around October 2017, the Respondent opened a new bank account in the name of JL (the “Fake Account”) without the knowledge or authorization of JL. The Respondent then cashed out a term deposit investment in the amount of $5,182.32 from an actual account held by JL and transferred the proceeds from the investment into the Fake Account without the knowledge or authorization of JL.
  2. In addition, from November 2017 to January 2018, the Respondent transferred the amounts listed in the chart in paragraph 6 from bank accounts held by DH, AC Ltd, BQ, or CA into the Fake Account without their knowledge or authorization.
  3. The Respondent used a bank access card linked to the Fake Account to access the monies in the account through a bank ATM machine, without the knowledge or authorization of JL, DH, AC Ltd, BQ, or CA.
  4. The Respondent used the monies obtained from JL, DH, AC Ltd, BQ, and CA for her personal benefit.
  5. In January 2018, one of the individuals whose money was misappropriated made an inquiry to the Bank about an unauthorized transaction processed in that person’s bank account. The Bank commenced an investigation into the Respondent’s conduct that revealed the conduct described in this Notice of Hearing.
  6. The Bank subsequently compensated the individuals by repaying the monies that had been misappropriated by the Respondent.
  7. By virtue of the foregoing conduct, the Respondent misappropriated approximately $27,557 from two clients and two other individuals, contrary to MFDA Rule 2.1.1.

Allegation #2 – Failure to Cooperate

  1. Commencing in March 2018, the Respondent failed to cooperate with Staff’s investigation into her misconduct.
  2. Staff sent letters dated March 5, 2018 and March 28, 2018 by registered and ordinary mail to the Respondent at her last known address requesting that the Respondent provide certain documents and information respecting matters it was investigating. A signature was received in respect of both letters sent by registered mail. The letter sent by ordinary mail was not returned to Staff. The Respondent failed to respond to either of the letters.
  3. By letter dated September 13, 2018, Staff requested that the Respondent attend an interview to give information respecting matters it was investigating. Staff requested that the Respondent contact Staff by no later than October 5, 2018. A process server personally served the Respondent with the letter.
  4. On September 26, 2018, the Respondent contacted Staff by telephone and requested an extension of time until November 15, 2018 to respond to Staff’s request to schedule an interview. Staff granted the requested extension to the Respondent and requested that the Respondent contact Staff to schedule an interview to give information about matters relevant to Staff’s investigation by no later than November 30, 2018. The Respondent did not respond to Staff by the extension date of November 30, 2018.
  5. On December 4, 2018, Staff contacted the Respondent by e-mail advising that, if she did not contact Staff, Staff would schedule the interview for January 10, 2019 and the Respondent would be required to attend on that date. The Respondent did not respond to Staff’s request to schedule the interview.
  6. Staff held the interview on January 10, 2019. The Respondent did not attend the interview.
  7. By virtue of the foregoing, the Respondent has failed to cooperate with Staff’s investigation of her 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: Justin Dunphy
Email: jdunphy@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.

[1]In September 2009, the registration category mutual fund salesperson was changed to “dealing representative” when National Instrument 31-103 came into force.