news-banner

MFDA Notice of Hearing

Pdf Icon
HomeCurrent Hearings202022 - Douglas Elia Tuitakalai › NOH202022

202022

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

Douglas Elia Tuitakalai

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Central Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) on July 7, 2020 at 10:00 a.m. (Eastern), or as soon thereafter as the appearance can be held, concerning a disciplinary proceeding commenced by the MFDA against Douglas Elia Tuitakalai (“Respondent”). Members of the public who would like to listen to the teleconference should contact hearings@mfda.ca to obtain particulars.

DATED: Apr 21, 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: Commencing in or about May 2017, the Respondent engaged in personal financial dealings with a client with respect to an arrangement to assign agreements of purchase and sale for two properties from the Respondent and his family members to the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 2.1.1, 2.5.1, and 1.1.2.

Allegation #2: Commencing on or about October 17, 2017, the Respondent had and continued in an outside activity with respect to the purchase and resale of real estate that was not disclosed to or approved by the Member, contrary to the Member’s policies and procedures and MFDA Rules 1.3.2, 2.1.1, 1.1.2, and 2.5.1.

Allegation #3: Commencing on or about September 23, 2019, the Respondent failed to cooperate with MFDA Staff’s investigation into his 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 17, 2013 to February 27, 2018, the Respondent was registered in Ontario as a dealing representative with Investors Group Financial Services Inc. (the “Member”), a Member of the MFDA.
  2. At all material times, the Respondent carried on business in the Brampton, Ontario area.
  3. The Respondent is not currently registered in the securities industry in any capacity.

Allegation #1 – Personal Financial Dealings with a Client

  1. At all material times, the Member’s policies and procedures prohibited its Approved Persons from engaging in personal dealings with clients.
  2. In or around early 2017, the Respondent and members of his family entered into agreements of purchase and sale to purchase two condominium units in a building that was under construction.
  3. In or around March 2017, the Respondent met with MR and conducted a personal financial review and gathered Know Your Client information about MR, with a view to MR opening investment accounts with the Member. At this time, MR did not open investments accounts with the Member.  During this meeting, the Respondent learned that MR had an interest in purchasing real estate.
  4. Shortly after this meeting, MR told the Respondent that she was interested in purchasing a condominium unit in the same building where the Respondent and has family members had purchased their yet to be built units.
  5. At this time, the Respondent and his family members were no longer interested in completing their purchase of the condominium units. The Respondent offered MR an opportunity where the Respondent and his family members would assign the agreements of purchase and sale for the two condominium units in exchange for a $17,000 payment from MR.  The Respondent explained to MR that the $17,000 was to pay the assignment and legal fees required to complete the transfers of the condominium units to MR.
  6. MR agreed to the arrangement, but the assignments could not be done until a designated assignment period later in 2017.
  7. Beginning in May 2017, MR opened accounts and became a client of the Member whose accounts were serviced by the Respondent.
  8. In October 2017, MR obtained a $17,000 bank draft, which she gave to the Respondent in accordance with the arrangement for the assignment of the agreements of purchase and sale for the two condominium units discussed above.
  9. On or about October 30, 2017, the Respondent deposited the $17,000 bank draft into his personal bank account.
  10. In November 2017, MR complained to the Member that she had given her advisor $17,000 on a real estate deal that she no longer wished to proceed with. MR declined to identify her advisor, but from the information provided, the Member was able to identify that MR was describing the Respondent.
  11. In or around January 2018, the Respondent returned the $17,000 to MR.
  12. The Respondent’s activities gave rise to a conflict or a potential conflict of interest, which the Respondent did not disclose to the Member.
  13. By engaging in the conduct described above, the Respondent had a conflict or potential conflict of interest, which he failed to disclose to the Member or address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 2.1.1, 1.1.2, and 2.5.1.

Allegation #2 – Outside Activity

  1. At all material times, the Member’s policies and procedures required its Approved Persons to obtain prior approval from the Regional Director and the Vice-President, Financial Services responsible for their region before engaging in an outside business activity.
  2. On or about March 15, 2017, the Respondent disclosed to his Division Director that he engaged in the purchase and resale of real estate. SB told the Respondent that he needed to complete an Outside Activity approval form for this activity.
  3. On the same day, SB’s assistant emailed a copy of the Member’s Outside Activity approval form to the Respondent.
  4. The Respondent did not complete and submit the Outside Activity approval form to the Member. The Respondent did not obtain approval for his real estate activities from the Regional Director and Vice President, Financial Services responsible for his region.
  5. On or about September 19, 2017, the Respondent entered into a partnership agreement with a third party to purchase, renovate, and re-sell a real estate property. The purchase of the real estate property was completed on or about October 20, 2017.
  6. The Respondent did not disclose his intention to purchase, renovate, and re-sell a real estate property with a third party to the Member or obtain the Member’s prior approval in accordance with its policies and procedures.
  7. By engaging in the conduct described above, the Respondent had and continued in an outside activity, which he failed to disclose to the Member or obtain prior approval, contrary to the Member’s policies and procedures and MFDA Rules 1.3.2, 2.1.1, 1.1.2, and 2.5.1.

Allegation #3 - Failure to Cooperate

  1. On or about March 13, 2018, Staff of the MFDA (“Staff”) commenced an investigation into the Respondent’s conduct concerning his personal financial dealings described above, and other matters.
  2. During the course of the interview, the Respondent undertook to provide Staff with additional documents and answer questions concerning certain transactions that appeared in his banking records.
  3. On June 7, 2019, Staff sent a letter to the Respondent’s counsel, detailing the requested documents and information, and requiring a response by June 21, 2019.
  4. On June 25, 2019, counsel for the Respondent provided a partial response to the documents and information requested by Staff. Counsel for the Respondent advised Staff that the Respondent was obtaining additional documentation to answer Staff’s requests.
  5. On July 17, 2019, Staff sent an email to the Respondent’s counsel requesting the outstanding documents and information.
  6. On September 3, 2019, Staff sent a follow up request for the outstanding documents and information to the Respondent’s counsel.
  7. On September 11, 2019, counsel for the Respondent advised that she was no longer acting for the Respondent.
  8. On September 23, 2019, Staff sent a letter to the Respondent by process server, requesting that the Respondent provide the outstanding documents and information by October 7, 2019. The process server attempted to deliver the letter on September 28, 2019 at the address provided by the Respondent during his interview, but was unable to locate the Respondent at the address.
  9. On September 30, 2019, the process server attempted to serve a copy of the September 23, 2019 letter to the Respondent at the Respondent’s former address, where Staff had previously sent the Respondent correspondence. The Respondent’s father accepted service of the letter.
  10. The Respondent did not reply to Staff’s correspondence and did not provide the outstanding documents and information requested by Staff.
  11. On October 25, 2019, Staff sent an email to the Respondent, asking him to contact Staff by telephone.
  12. The Respondent did not reply to Staff’s email and did not contact Staff.
  13. By failing to provide the documents and information requested by Staff in furtherance of its investigation of his conduct, the Respondent has undermined Staff’s ability to determine the full nature and extent of his activities in relation to the misconduct described herein, including the extent to which he engaged in personal financial dealings with other clients and individuals.
  14. Based on the foregoing, the Respondent has failed to cooperate with an investigation into his conduct by Staff, 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
121 King Street West
Suite 1000
Toronto, ON M5H 3T9
Attention: Alan Melamud
Email: amelamud@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.

737430