MFDA Notice of Hearing

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202133

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

Alim Kassam

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Pacific Regional Council (the “Hearing Panel”) of the Mutual Fund Dealers Association of Canada (the “MFDA”) on October 19, 2021 at 10:00 a.m. (Pacific) or as soon thereafter as the hearing can be held, concerning a disciplinary proceeding commenced by the MFDA against Alim Kassam (the “Respondent”). Members of the public who would like to listen to the teleconference should contact hearings@mfda.ca to obtain particulars.

DATED: Jul 19, 2021

"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
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 on or about November 8, 2018 and December 2018, in his capacity as a branch manager, the Respondent did not adequately query or report to the Member information that he received that an Approved Person who worked at the branch location that he supervised had solicited an individual to purchase an investment outside the Member, contrary to the Member’s policies and procedures, MFDA Rules 2.5.5(f), 2.1.1, 1.1.2 and 2.5.1, and MFDA Policy No. 6.

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 October 20, 2010 to October 22, 2020, the Respondent was registered in British Columbia as a dealing representative with Sun Life Financial Investment Services (Canada) Inc. (the “Member”), a Member of the MFDA.
  2. From November 4, 2010 to July 22, 2020, the Member designated the Respondent as a branch manager.
  3. On October 22, 2020, the Member terminated the Respondent, and he is no longer registered in the securities industry in any capacity.
  4. At all material times, the Respondent conducted business in the Abbotsford, British Columbia area.

Failure to Adequately Query and Report to the Member Potential Misconduct

  1. At all material times, the policies and procedures of the Member prohibited the sale of investment products by Approved Persons that were not sold for the account of the Member and processed through the facilities of the Member. In addition, the policies and procedures of the Member (the “PPM”) prohibited Approved Persons from engaging in outside activities without the prior written approval of the Member.
  2. At all material times, the Member’s policies and procedures provided that branch managers were responsible for monitoring that advisors were complying with regulatory requirements and the policies and procedures of the Member.
  3. At all material times, the policies and procedures of the Member required branch managers to report to the Member all complaints alleging that Approved Persons may be involved in securities related business outside the Member or other undisclosed outside activities.
  4. On November 8, 2018, individual X sent a message to the Respondent advising him that one of the advisors who the Respondent was responsible for supervising had solicited individual X to invest in “a private investment bond guaranteeing 100% returns for some wind farm in Wyoming.” In his message to the Respondent, individual X did not name the person who solicited him to invest.
  5. On November 10, 2018, the Respondent responded to the message sent by individual X and advised that he would “look into” the matter. At this time, the Respondent did not ask individual X to identify who had solicited him to invest in the private investment, nor did he report the information that he had received from individual X to the Member.
  6. On November 16, 2018, the Respondent sent a further message to individual X inquiring as to the identity of the advisor who had solicited individual X to invest in the private investment.
  7. On November 28, 2018, individual X responded to the Respondent’s inquiry and provided him with information which enabled the Respondent to identify that the individual who had solicited individual X to invest was Matthew de Haan (“de Haan”), who at the time was an Approved Person registered as a dealing representative with the Member.
  8. After receiving the information from individual X, the Respondent did not take any further steps to investigate the matter such as contacting de Haan to obtain further information about his solicitation of investments from individual X or from any other individuals, nor did he report the information that he had received from individual X to the Member.
  9. De Haan is currently the subject of an MFDA disciplinary proceeding in which Staff of the MFDA has made allegations, including that de Haan solicited a client and other individuals to invest in securities outside the Member. At least one of these solicitations occurred after the Respondent learned, but failed to act upon the knowledge, that an Approved Person under his supervision was soliciting investment in securities outside the Member.
  10. In his capacity as branch manager, the Respondent ought to have reported to the Member the information he received on November 8, 2018 from individual X. The Member would then have been obligated to conduct a reasonable supervisory investigation into these activities and to report the alleged conduct to the MFDA in accordance with MFDA Policy No. 6.
  11. By virtue of the foregoing, in his capacity as a branch manager, the Respondent did not adequately query or report to the Member information that he received that an Approved Person who worked at the branch location that he supervised had solicited an individual to purchase an investment outside the Member, contrary to the Member’s policies and procedures, MFDA Rules 2.5.5(f), 2.2.1, 1.1.2 and 2.5.1, and MFDA Policy No. 6.

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
Pacific Regional Office
650 West Georgia Street, Suite 1220
Vancouver, BC V6B 4N9
Attention: Zaid Sayeed
Email: zsayeed@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.

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