MFDA Notice of Hearing

View and Download English PDF
HomeUnder Review / Appeal Hearings202024 - Krystal Jean Vanlandschoot › NOH202024

202024

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

Krystal Jean Vanlandschoot

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 August 11, 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 Krystal Jean Vanlandschoot (“Respondent”). Members of the public who would like to listen to the teleconference should contact hearings@mfda.ca to obtain particulars.

DATED: May 20, 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 May 2018 and July 2018, the Respondent misappropriated at least $5,489 from two clients, contrary to MFDA Rule 2.1.1.

Allegation #2: Commencing in September 2018, the Respondent failed to cooperate with MFDA Staff during the course of an 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 February 25, 2011 until September 8, 2014 and from August 25, 2015 until August 2, 2018, the Respondent was registered in Ontario as a dealing representative (formerly known as a mutual fund salesperson) with CIBC Securities Inc. (the “Member”), a Member of the MFDA.
  2. At all material times, the Respondent conducted business at a branch of the Member (the “Branch”) in Simcoe, Ontario. The Respondent was also an employee of Canadian Imperial Bank of Commerce (the “Bank”) which is affiliated with the Member and which operated a bank branch at the same premises as the Branch.
  3. On August 2, 2018, the Member terminated the Respondent as a result of the conduct described herein. The Respondent is not currently registered in the securities industry in any capacity.

Allegation #1 – Misappropriation of Monies

Client NS
  1. On or about May 3, 2018, without authorization from the Bank, the Respondent issued a bank draft in the amount of $2,159 from an internal general ledger bank account (the “GL Account”) of the Bank. The Respondent issued the bank draft for her personal benefit and made the bank draft payable to a third party. After issuing the bank draft, the GL Account remained in an overdrawn position.
  2. At all material times, client NS was a client of the Member.
  3. On or about July 18, 2018, without client NS’s knowledge or authorization, the Respondent processed a $2,159 withdrawal from a bank account of client NS and transferred the monies to the GL Account in order to offset the overdrawn position in the GL Account that resulted from the unauthorized bank draft issued by the Respondent.
Client PF
  1. On or about May 8, 2018, the Respondent issued a bank draft in the amount of $3,330.05 from the GL Account at the Bank. The Respondent issued the bank draft for her personal benefit and made the bank draft payable to a third party. After issuing the bank draft, the GL Account remained in an overdrawn position.
  2. At all material times, client PF was a corporation and client of the Member.
  3. On or about July 19, 2018, without client PF’s knowledge or authorization, the Respondent processed a $3,341.93 redemption from a Guaranteed Investment Certificate (“GIC”) in an account held by client PF, and transferred $3,330.05 of the redemption proceeds into the GL Account in order to offset the overdrawn amount in the GL Account that resulted from the unauthorized bank draft issued by the Respondent.
  4. In or about July 2018, the Bank identified the unauthorized transactions in the accounts described above. The Bank commenced an investigation into the Respondent’s conduct that revealed the conduct described herein.
  5. The Bank subsequently compensated the clients.
  6. By virtue of the foregoing, the Respondent misappropriated at least $5,489 from two clients, contrary to MFDA Rule 2.1.1.

Allegation #2 – Failure to Cooperate

  1. Commencing in September 2018, the Respondent failed to cooperate with the investigation of Staff into her conduct described above. As set out in the table below, Staff has made a number of requests to the Respondent to provide information and documentation and attend for an interview with Staff. The Respondent has failed to provide the requested documentation and has failed to attend for an interview with Staff.

Date

Description of Correspondence

Method of Delivery

September 17, 2018

Staff requested that the Respondent advise whether she had received authorization from clients NS and PF, as well as from another client, HG, to withdraw monies from their bank accounts, and to advise whether she had misappropriated monies from any additional clients.

Registered Mail Regular Mail

October 3, 2018

Staff repeated its request for the information requested in the September 17, 2018 letter.

Staff informed the Respondent that failing to provide the requested information may lead Staff to commence enforcement proceedings against the Respondent for failing to cooperate with Staff’s investigation.

Registered Mail Regular Mail

February 7, 2019

Staff repeated its request for the information requested in the September 17, 2018 letter.

Staff requested that the Respondent provide a listing of all personal and business bank accounts held by the Respondent and that the Respondent provide copies of the account statements for these bank accounts to Staff.

Staff requested that the Respondent attend for an interview to give information in respect of her conduct.

Staff informed the Respondent that failing to provide the requested information or to attend for an interview may lead Staff to commence enforcement proceedings against the Respondent for failing to cooperate with Staff’s investigation.

Personal Service Registered Mail Regular Mail

March 20, 2019

Staff repeated its request for the information and documents requested in the February 7, 2019 letter.

Staff repeated its request that the Respondent attend for an interview to give information in respect of her conduct.

Staff informed the Respondent that failing to provide the requested information or to attend for an interview may lead Staff to commence enforcement proceedings against the Respondent for failing to cooperate with Staff’s investigation.

Letter left at Respondent’s Address

April 26, 2019

Staff requested the Respondent contact Staff immediately upon receipt of the letter.

Staff informed the Respondent that failure to cooperate with its investigation may lead Staff to commence enforcement proceedings against the Respondent.

Letter left with Respondent’s Spouse

  1. The Respondent did not respond to Staff’s correspondence described above.
  2. The Respondent has not provided Staff with the requested information and documentation nor has she attended for an interview with Staff to provide information concerning the matters under investigation.
  3. As a result of the Respondent’s failure to cooperate with Staff’s investigation, Staff has been unable to determine the full nature and extent of the Respondent’s conduct described herein, including whether she misappropriated monies from client HG or any other clients.
  4. By virtue of the foregoing, the Respondent failed to cooperate with Staff’s investigation into 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
121 King Street West
Suite 1000
Toronto, ON M5H 3T9
Attention: Brendan Forbes
Email: bforbes@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.

744626