Notice of Hearing

NOTICE is further given that the Corporation alleges the following violations of the Mutual Fund Dealer Rules:

PARTICULARS

NOTICE is further given that the following is a summary of the facts alleged and intended to be relied upon by the Corporation at the hearing:

Registration History

1. Since approximately 2001, the Respondent has been registered in the securities industry.
2. Since March 7, 2017, the Respondent has been registered in Saskatchewan as a dealing representative with Investia Financial Services Inc. (the “Dealer Member”), a Dealer Member of the Corporation (formerly a Member of the MFDA).[2]
3. At all material times, the Respondent conducted business in the Saskatoon, Saskatchewan area.

Allegation #1 – Altered Account Forms

4. At all material times, the Dealer Member’s policies and procedures prohibited altering any information on a signed document without the client initialing the document to show that the alteration was approved.
5. Between March 2017 and November 2020, the Respondent, or his assistant for whom he was responsible, altered and used to process transactions, 31 account forms in respect of 26 clients by altering information on the account forms without having the client initial the alterations.
6. The altered forms consist of:
   • 14 Transfer Authorization Forms;
   • 8 New Client Application Forms;
   • four Order Instruction Forms;
   • two Know-Your-Client (KYC) Update Forms;
   • one Non-Financial Instructions Form;
   • one Systematic Instruction Form; and
   • one Systematic Purchases Form.
7. The alterations made by the Respondent consisted of alterations to risk tolerance, net worth, investment objectives, monetary amounts, account numbers, dates, fund codes, fund numbers, plan types, transfer types, and transaction types.
8. By virtue of the foregoing, the Respondent failed to observe a high standard of conduct and ethics in the transaction of business and engaged in conduct unbecoming of an Approved Person, contrary to Mutual Fund Dealer Rule 2.1.1 (formerly MFDA Rule 2.1.1).

Allegation #2 – Pre-Signed Account Forms

9. At all material times, the Dealer Member’s policies and procedures prohibited having a client sign a form which is blank or partially completed.
10. Between August 2017 and July 2020, the Respondent, or his assistant for whom he was responsible, obtained, possessed, and used to process transactions, 23 pre-signed account forms in respect of 19 clients.
11. The pre-signed forms consist of:
    • 11 KYC Update Forms;
    • seven Automatic Conversion of Free Units Forms;
    • two Order Instruction Forms;
    • two New Client Application Forms; and
    • one Systematic Instruction Form.
12. By virtue of the foregoing, the Respondent failed to observe a high standard of conduct and ethics in the transaction of business and engaged in conduct unbecoming of an Approved Person, contrary to Mutual Fund Dealer Rule 2.1.1 (formerly MFDA Rule 2.1.1).

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 pursuant to Mutual Fund Dealer Rule 1A that any person subject to the jurisdiction of the Mutual Fund Dealers Association of Canada prior to January 1, 2023 remains subject to the jurisdiction of the Corporation in respect of any action or matter that occurred while that person was subject to the jurisdiction of the Mutual Fund Dealers Association of Canada at the time of such action or matter.

NOTICE is further given that the Mutual Fund Dealer Rules provide that if, in the opinion of the Hearing Panel, the Respondent:

• has failed to carry out any agreement with the Corporation;
• has failed to comply with or carry out the provisions of any federal or provincial statute relating to the business of the Dealer Member or of any regulation or policy made pursuant thereto;
• has failed to comply with the provisions of the Mutual Fund Dealer Rules of the Corporation;
• has engaged in any business conduct or practice which such Hearing Panel 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;
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, Mutual Fud Division within twenty (20) days from the date of service of this Notice of Hearing.

A Reply shall be served upon Enforcement Counsel at:

New Self-Regulatory Organization of Canada
121 King Street West
Suite 1000
Toronto, ON M5H 3T9
Attention: Michael A.M. Mantle
Email: mmantle@mfda.ca

A Reply shall be filed by:

1. providing four copies of the Reply to the Office of the Corporate Secretary, Mutual Fund Division by personal delivery, mail or courier to:
   1. New Self-Regulatory Organization of Canada
      121 King Street West
      Suite 1000
      Toronto, ON M5H 3T9
      Attention: Office of the Corporate Secretary, Mutual Fund Division; or
2. transmitting one electronic copy of the Reply to the Office of the Corporate Secretary, Mutual Fund Division 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 Corporation in the Notice of Hearing; or
2. admit the facts alleged and conclusions drawn by the Corporation 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 Corporation 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 Corporation in the Notice of Hearing as having been proven and may impose any of the penalties described in the Mutual Fund Dealer Rules.

End.