MFDA Notice of Hearing

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202061

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

Marja Grobbink Harmer

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”) on February 26, 2021 at 9:00 a.m. (Mountain), or as soon thereafter as the appearance can be held, concerning a disciplinary proceeding commenced by the MFDA against Marja Grobbink Harmer (“Respondent”). Members of the public who would like to listen to the teleconference should contact hearings@mfda.ca to obtain particulars. The Hearing on the Merits will take place in Regina, Saskatchewan.

DATED: Dec 14, 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 June 2013 and February 2017, the Respondent engaged in personal financial dealings with clients by:

  1. jointly investing with clients in real estate investments through a company that she owned or operated; or
  2. opening and maintaining a joint bank account with clients relating to real estate investments,

which gave rise to a conflict or potential conflict of interest that she failed to disclose to the Member or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to the policies and procedures of the Member and MFDA Rules 2.1.4, 2.1.1, 2.5.1 and 1.1.2.

Allegation #2: Between June 2013 and February 2017, the Respondent engaged in securities related business that was not carried on for the account or through the facilities of the Member, when she solicited, recommended, sold or facilitated the sale of investments by clients in real estate investments, contrary to MFDA Rules 1.1.1 and 2.1.1.

Allegation #3: Between June 2013 and February 2017, the Respondent engaged in outside business activities that were not disclosed to or approved by the Member when she:

  1. solicited, recommended, sold or facilitated the sale of investment by clients in real estate investments;
  2. incorporated companies or served as the President or Director of the companies; or
  3. became an independent distributor for a skin care company,

contrary to the Member’s policies and procedures and MFDA Rules 1.2.1(c)[1] (now 1.3.2), 2.1.1, 2.5.1 and 1.1.2.

Allegation #4: Between December 2013 and February 2017, the Respondent engaged in securities related business that was not carried on for the account or through the facilities of the Member, by recommending, selling or facilitating the sale of investment in exempt market or other investment products to clients, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 1.1.2, 2.1.1, and 2.5.1.

Allegation #5: Commencing in July 2019, the Respondent failed to cooperate with an investigation by MFDA Staff 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 August 2002 to February 2017, the Respondent was registered in Saskatchewan as a dealing representative with Investors Group Financial Services Inc. (“Member”), a Member of the MFDA.
  2. On February 1, 2017, the Respondent resigned from the Member, and she is no longer registered in the securities industry in any capacity.
  3. At all material times, the Respondent carried on business in the Regina, Saskatchewan area.

Allegation #1 – Personal Financial Dealings with Clients

Background
  1. At all material times, the Member’s policies and procedures prohibited its Approved Persons from entering into any investment arrangements or business relationships with clients.
  2. As described below, without prior disclosure to or approval from the Member, the Respondent entered into various joint venture agreements (collectively the “Joint Venture Agreements”) with the Clients (as defined in paragraph 8) for the purchase and operation of rental properties. At all material times, the Joint Venture Agreements were not investments approved to be offered by Approved Persons of the Member to clients.
  3. The Respondent entered into the Joint Venture Agreements through H&H Real Estate Investments Ltd. (“H&H”), a company that she owned and operated. On or about June 21, 2013, without prior disclosure to or approval from the Member, the Respondent incorporated H&H, and became the President, Director and a shareholder of the company.
  4. As described below, 3D Real Estate Investments Ltd. (“3D”) was also a party to various Joint Venture Agreements with H&H and the clients. 3D was owned or operated by EK, a friend and business associate of the Respondent.
  5. The following clients (collectively the “Clients”) entered into the various Joint Venture Agreements with the Respondent, and who were at all material times clients of the Member whose accounts were serviced by the Respondent:
    1. clients EW and RW (spouses) (“Clients WA”);
    2. clients MW and LW (spouses) (“Clients WI”);
    3. clients CH and AH (spouses) (“Clients H”); and
    4. clients PB and DB (spouses) (“Clients B”).
Robinson Street Joint Venture
  1. Between June 2013 and October 2013, the Respondent approached the Clients and offered them an investment opportunity that entailed pooling money contributed by the Clients to jointly purchase and operate with the Respondent a rental apartment building located on Robinson Street in Regina, Saskatchewan (the “Robinson Street Property”).
  2. The Respondent recommended that the Clients invest, and provided them with marketing materials to promote this investment opportunity. The marketing materials had not been disclosed to or approved by the Member.
  3. In or around October 2013, the Clients each signed a joint venture agreement with respect to their participation in the purchase and operation of the Robinson Street Property (the “Robinson Joint Venture Agreement”).
  4. The parties to the Robinson Joint Venture Agreement were the Clients, H&H and 3D.
  5. Pursuant to the Robinson Joint Venture Agreement, Clients WA, H, WI and B each contributed $100,000 in exchange for a 10% ownership interest in the Robinson Street Property.
  6. Neither the Respondent, nor her company H&H, contributed money towards the purchase price of the property (“capital”) but received a 12.5% ownership interest in the Robinson Street Property.
  7. Neither EK, nor her company 3D, contributed capital but received a 47.5% ownership interest in the Robinson Street Property.
  8. The Clients funded their investments in the Robinson Joint Venture Agreement as follows:
    1. Clients WA obtained a line of credit secured by their home based on the recommendation of the Respondent;
    2. Clients WI redeemed mutual funds from their non-registered investment account at the Member;
    3. Clients H contributed cash savings; and
    4. Clients B obtained a line of credit secured by their home.
  9. Title to the Robinson Street Property was held by 101270256 Saskatchewan Ltd. (the “Robinson Company”), which was incorporated on November 25, 2014. The Respondent and her friend EK became Directors of the Robinson Company. The Clients, H&H and 3D became shareholders of the Robinson Company.
  10. The Respondent did not disclose her involvement in the Robinson Company to the Member, or obtain approval to be a Director or shareholder of the company.
  11. The Respondent also failed to disclose to the Member that a conflict or potential conflict of interest arose as a result of her personal financial dealings with the Clients when she solicited the investment of monies in the Robinson Company from each of the Clients.
  12. The Robinson Joint Venture Agreement stated that the investors would each receive $400 per month after the first year of the Robinson Joint Venture Agreement, and would receive the return of the entire amount of their principal investments at the end of the fifth year (or earlier).
  13. Commencing in or about October 2013 and continuing until in or about October 2018:
    1. Clients WA, B, and WI each received quarterly repayments of a portion of their principal investment totaling $17,600; and
    2. Clients H received quarterly repayments of a portion of their principal investment totaling $16,400.
  14. After in or about October 2018, the Clients ceased receiving any further repayments of their principal investments, and the Respondent also ceased responding to inquiries from the Clients about the status of their investment and their requests for repayment of their investments in the company.
  15. In or around March 2016, EK obtained a mortgage of $150,000 on the Robinson Street Property without the knowledge or approval of the Clients, and kept the proceeds from this mortgage and did not repay it.
  16. On or around April 15, 2020, the Respondent and EK reached an agreement with the Clients whereby H&H and 3D transferred their respective shares and liabilities in the Robinson Company to the Clients.
Vaughn Street Joint Venture
  1. Between November 2013 and May 2014, the Respondent approached Clients WA, WI, and H and offered them an investment opportunity that entailed pooling money contributed by Clients WA, WI and H to jointly purchase and operate with the Respondent a rental apartment building located on Vaughn Street in Regina, Saskatchewan (the “Vaughn Street Property”).
  2. The Respondent recommended that Clients WA, WI, and H invest, and provided them with marketing materials to promote this investment opportunity. The marketing materials had not been disclosed to or approved by the Member.
  3. On or around February 27, 2015, Clients WA, WI, and H each signed a joint venture agreement for the purchase and operation of the Vaughn Street Property (the “Vaughn Joint Venture Agreement”). The Respondent’s company, H&H, EK’s company 3D, and two other investors who were not clients of the Member were also parties to the Vaughn Joint Venture Agreement.
  4. On or around August 26, 2015, four additional investors who were not clients of the Member signed an addendum to the Vaughn Joint Venture Agreement and were added as parties to the agreement.
  5. Clients WA, WI and H each contributed $100,000 each in exchange for a 5.714% ownership interest in the Vaughn Street Property.
  6. Neither the Respondent, nor her company H&H, contributed capital but received a 12.5% ownership interest in the Vaughn Street Property.
  7. Neither EK, nor her company 3D, contributed capital but received a 38.78% ownership interest in the Vaughn Street Property.
  8. The Client who invested in the Vaughn Joint Venture Agreement funded their investments as follows:
    1. Clients WA obtained a line of credit secured by their home based on the recommendation of the Respondent;
    2. Clients WI redeemed mutual funds from their non-registered investment account at the Member; and
    3. Clients H contributed cash savings.
  9. The Vaughn Joint Venture Agreement stated that the investors would receive between $400 and $700 per month after the first year of the Vaughn Joint Venture Agreement, and would receive the return of their entire investment within five to seven years.
  10. Title to the Vaughn Street Property was held by 101290286 Saskatchewan Ltd. (the “Vaughn Company”), incorporated on October 7, 2015. The Respondent and EK became Directors of the Vaughn Company. Clients WA, WI, H, the Respondent’s company H&H, EK’s company 3D, and five additional investors became shareholders of the Vaughn Company.
  11. The Respondent did not disclose her involvement in Vaughn Company to the Member, or obtain approval to be a Director or shareholder of the company.
  12. The Respondent also failed to disclose to the Member that a conflict or potential conflict of interest arose as a result of her personal financial dealings with the Clients when she solicited the investment of monies in the Vaughn Company from Clients WA, WI and H.
  13. Clients WA received one quarterly principal repayment of $3,157, Clients WI received $1,628, and Clients H received $3,142. Clients WA, WI and H have not received any further returns or repayments from their investments.
  14. Between 2017 and 2019, Clients WA, WI and H were each recipients of cash calls that required them to contribute additional payments of $17,829 each to cover cash shortfalls pursuant to the terms of the Vaughn Joint Venture Agreement.
  15. On or around September 30, 2019, Clients WA, WI, and H, and other individuals commenced a civil claim for damages against the Respondent and EK pertaining to the Vaughn Joint Venture Agreement.
  16. To date, Clients WA, WI and H have not recovered their principal investment or the amounts contributed pursuant to cash calls in respect of the Vaughn Company except to the extent referenced in paragraph 37 above.
Montague Joint Venture
  1. In March 2014, the Respondent approached Clients WA and offered them an investment opportunity to finance the purchase and operation with the Respondent of a rental house located on Montague Street in Regina, Saskatchewan (the “Montague Street Property”).
  2. The Respondent recommended that Clients WA invest, and provided them with marketing materials to promote this investment opportunity. The marketing materials had not been disclosed to or approved by the Member.
  3. On or around October 9, 2015, Clients WA signed a joint venture agreement with the Respondent’s company H&H for the purchase and operation of the Montague Street Property (the “Montague Joint Venture Agreement”).
  4. Clients WA contributed $70,000 to purchase a 50% share of the net profit from the Montague Street Property. Title to the Montague Street Property was held by Clients WA.
  5. The Respondent, through her company H&H, contributed $1 to purchase a 50% share of the net profit from the Montague Street Property.
  6. Clients WA funded their investment in the Montague Joint Venture Agreement by obtaining a line of credit secured by their home based on the recommendation of the Respondent.
  7. On or around March 25, 2014, the Respondent and Clients WA opened a joint bank account to facilitate the receipt of rental income from and the payment of expenses associated with the operation and maintenance of the Montague Street Property as a rental property.
  8. The Respondent failed to disclose to the Member that a conflict or potential conflict of interest arose as a result of her personal financial dealings with Clients WA when she solicited the investment of monies in the Montague Street Property, and opened a bank account with Clients WA.
  9. As of October 2020, Clients WA contributed approximately $150,000 towards the Montague Joint Venture Agreement including initial investments, operating expenses and interest payments.
Hillcrest Joint Venture
  1. In September 2015, the Respondent approached Clients H and offered them an investment opportunity that entailed the pooling of money contributed by the Clients H with other investors to jointly purchase and operate with the Respondent a rental apartment building called the Hillcrest Apartments located in Saskatoon, Saskatchewan (the “Hillcrest Property”).
  2. The Respondent recommended that Clients H invest, and provided them with marketing materials to promote this investment opportunity. The marketing materials had not been disclosed to or approved by the Member.
  3. On or around October 26, 2015, Clients H signed a joint venture agreement (“Hillcrest Joint Venture Agreement”) with EK, the Respondent, and five other investors for the purchase and operation of the Hillcrest Property.[2]
  4. Clients H contributed $100,000 to purchase a 6.154% interest in the Hillcrest Joint Venture Agreement.
  5. Neither the Respondent, nor her company H&H, contributed capital but received a 2.5% interest in the Hillcrest Joint Venture Agreement.
  6. EK, through her company 3D, contributed $50,000 capital and received a 15.38% interest in the Hillcrest Joint Venture Agreement.
  7. Clients H funded their investments in the Hillcrest Joint Venture Agreement using cash savings.
  8. Clients H never received any returns on their investments. Clients H received cash calls that required them to contribute additional payments of $17,354 to cover cash shortfalls pursuant to the terms of the Hillcrest Joint Venture Agreement. Ultimately, the Hillcrest Property ended up being unprofitable, and in 2019 Clients H sold their ownership interest to another investor for $7.20.
  9. The Respondent failed to disclose to the Member that a conflict or potential conflict of interest arose as a result of her personal financial dealings with Client H when she solicited the investment of monies in the Hillcrest Property.
  10. By virtue of the foregoing, the Respondent engaged in personal financial dealings with clients by:
    1. jointly investing with clients in real estate investments through a company she owned or operated; or
    2. opening and maintaining a joint bank account with clients relating to the real estate investments,
    which gave rise to a conflict or potential conflict of interest that she failed to disclose to the Member or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the clients, contrary to the policies and procedures of the Member and MFDA Rules 2.1.4, 2.5.1, 1.1.2 and 2.1.1.

Allegations #2 - Securities Related Business Outside the Member

  1. As described above, between June 2013 and February 2017, the Respondent solicited, recommended, sold or facilitated the investment by the Clients in the Joint Venture Agreements.
  2. The Joint Venture Agreements were not investments approved by the Member to be offered for sale by its Approved Persons. None of the investments by the Clients in the Joint Venture Agreements described above were carried on for the account or through the facilities of the Member.
  3. By virtue of the foregoing, the Respondent engaged in securities related business that was not carried on for the account or through the facilities of the Member, when she solicited, recommended, sold or facilitated the sale of investments by clients in real estate investments, contrary to MFDA Rules 1.1.1 and 2.1.1.

Allegation #3 - Unapproved Outside Business Activities

  1. At all material times, the Member’s policies and procedures required its Approved Persons to obtain prior approval from the Member before engaging in any outside business activity.
Joint Venture Agreements
  1. As described above, between June 2013 and February 2017, the Respondent recommended, sold or facilitated the investment by the Clients in the Joint Venture Agreements.
  2. The Respondent entered into the Joint Venture Agreements with clients for the purchase and operation of rental properties.
  3. Through the Joint Venture Agreements, the Respondent, through H&H, obtained ownership interests in the property, a percentage of the net profit from rental operations, or a percentage interest in the joint venture.
  4. The Respondent did not disclose to the Member that she intended to engage in real estate investing or operating rental properties with the Clients and she did not receive approval from the Member to do so.
H&H
  1. As described in paragraph 6, on or about June 21, 2013, the Respondent incorporated H&H, and was the President, Director and a shareholder of the company. The Respondent did not disclose to or obtain approval from the Member to operate and serve as an officer and Director of H&H.
The Robinson and Vaughn Companies
  1. As described in paragraphs 17 and 34, the Respondent was a Director of the Robinson Company and the Vaughn Company. The Respondent did not disclose to or obtain approval from the Member to be a Director of these companies.
Skin Care Company
  1. Between 2013 and 2014, the Respondent worked as an independent distributor for a skin care company called Nucerity International. The Respondent did not disclose to or obtain approval from the Member to engage in outside activities with Nucerity International.
  2. By virtue of the foregoing, the Respondent engaged in outside business activities that were not disclosed to or approved by the Member, contrary to the Member’s policies and procedures, and MFDA Rules 1.1.2, 1.2.1(c) (now 1.3.2), 2.1.1 and 2.5.1.

Allegation #4 - Securities Related Business Outside the Member

  1. At all material times, the Member’s policies and procedures required its Approved Persons to only offer products that the Member had approved for sale, and that all products be sold for the account and processed through the facilities of the Member.
Exempt Products
  1. In December 2013, the Respondent invited Clients WA to an event, during which EK presented and recommended exempt market investment products offered by Walton International Group Inc., its affiliates, and its subsidiaries (collectively “Walton”) to Clients WA and other potential investors.
  2. At all material times, investment products offered by Walton had not been approved for sale by Approved Persons of the Member.
  3. On or around March 6, 2014, the Respondent met Clients WA at their home to discuss and recommend the purchase of exempt market investment products offered by Walton (“Walton Investments”). The Respondent advised Clients WA that the Walton Investments were good investments because Walton had never lost any money and would provide about an 8% return. She also provided them with marketing materials pertaining to the Walton Investments.
  4. On or around May 8, 2014, the Respondent invited Clients WA to attend a financial investment seminar where a Walton representative presented various Walton Investments. The Respondent and EK both attended this seminar with Clients WA.
  5. On or around August 26, 2014, the Respondent met Clients WA at their home to obtain their signatures on transfer authorization forms, which the Respondent had prepared for Clients WA to sign, to facilitate the redemption of approximately $100,000 of their RRSP holdings at the Member and the transfer of the proceeds for the purpose of purchasing Walton Investments.
  6. On or around October 9, 2014, the Respondent met Clients WA at their home to obtain their signatures on a subscription agreement, which the Respondent had prepared for client EW to sign in order to facilitate the investment by client EW of $50,000 in Walton Investments.
  7. On or around February 19, 2015, in accordance with the recommendation of the Respondent, client RW entered into three additional subscription agreements for the purchase of exempt market products worth $50,000 as follows:

Date

Product

Investment

February 19, 2015

Omniarch Class C Bond

$20,000

Royal Oak Income Class II

$10,000

SecureCare Series F 5 Year Bond

$20,000

  1. Neither the Walton Investments or the additional exempt market products described in the chart at paragraph 79 were carried on for the account or through the facilities of the Member.
  2. As of September 2020, the combined value of the Walton Investments and additional exempt market products had declined from the $100,000 purchase price to approximately $24,966.
Kensington Development Mortgage Investments
  1. In or around August 2016, the Respondent and EK presented client AH with the opportunity to invest the amounts he held at the time in his RRSP to finance a real estate development project located on 19 Street in Calgary, Alberta (the “Kensington Development”).
  2. On or around August 9, 2016, the Respondent sent client AH an email containing completed transfer authorization forms for client AH to sign to transfer $100,000 from his RRSP account at the Member to Olympia Trust for the purpose of investing in the Kensington Development.
  3. On or around November 10, 2016, $100,000 was transferred from client AH’s RRSP account at Olympia Trust to finance a 24 month term mortgage for the Kensington Development. Subsequently, client AH received interest payments totaling approximately $14,133 and on March 8, 2018, his principal investment of $100,000 was returned to him.
  4. The Kensington Development investments were investments that the Member had not approved for sale by its Approved Persons. These investments were not carried on for the account or through the facilities of the Member.
  5. By virtue of the foregoing, the Respondent engaged in securities related business that was not carried on for the account or through the facilities of the Member, by recommending, selling or facilitating the sale of investment in exempt market or other investment products to clients, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 1.1.2, 2.1.1, and 2.5.1.
Allegation #6 – Failure to Co-operate
  1. On July 10, 2019, the Respondent attended an interview with Staff of the MFDA (“Staff”), to answer questions relevant to Staff’s investigation into the Respondent’s conduct described above.
  2. During the course of the interview on July 10, 2019, Staff asked the Respondent why her company, H&H, was granted equity in the Robinson Joint Venture Agreement without having provided any capital investment. The Respondent refused to answer this question.
  3. On July 12, 2019, Staff sent a letter by regular and registered mail to the Respondent requesting that she answer the question that she refused to answer during the interview, and requested that she provide additional information relating to her activities with the Nucerity outside business activity, the identity of individuals involved in the Kensington Development, and additional details about her introduction of the Clients to EK. Staff requested that the Respondent provide the information by August 5, 2019. The Respondent did not respond to Staff’s July 12, 2019 letter or otherwise provide the information that was requested in the letter.
  4. On November 19, 2019, Staff sent another letter by regular and registered mail to the Respondent reiterating its request for the information that it requested in its July 12, 2019 letter. Staff requested that the Respondent respond by December 3, 2019. On November 20, 2019, the Respondent received and signed for the November 19, 2019 letter which was sent by registered mail. The Respondent did not respond to Staff’s November 19, 2019 letter or otherwise provide the information that was requested in the letter.
  5. On January 7, 2020, Staff sent a letter by registered mail, personal service and email to the Respondent which reiterated its request for information requested in its July 12 and November 19, 2019 letters, and stated that if she did not provide a written response by January 24, 2020, then Staff would seek authorization to commence disciplinary proceedings to address her failure to co-operate with Staff’s investigation. On January 7, 2020, the Respondent was personally served with the January 7, 2020 letter. The Respondent did not respond to Staff’s January 7, 2020 letter.
  6. Due to the Respondent’s failure to cooperate with Staff’s investigation, Staff was unable to determine the full nature and extent of the Respondent’s conduct in relation to her outside business activities with Nucerity, the identity of parties involved in the Kensington Development, and the details of how she obtained an interest in the Robinson Street Property.
  7. By virtue of the foregoing, the Respondent failed to cooperate with an investigation by Staff 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
Prairie Regional Office
Suite 850, 800 – 6th Ave SW
Calgary, AB T2P 3G3
Attention: Sakeb Nazim
Email: snazim@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] Effective March 17, 2016, Rule 1.2.1(c) was amended and renumbered as MFDA Rule 1.3.2.
[2] Clients H signed an addendum to the Hillcrest Joint Venture Agreement on February 26, 2016, whereby an additional investor joined the Hillcrest Joint Venture Agreement.

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