Notice of Hearing

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

Allegation #1:  On April 6, 2021, the Respondent photocopied the signature pages from two account forms previously signed by a client and reused the signature pages on two account forms and submitted the forms to the Dealer Member for processing, contrary to Mutual Fund Dealer Rule 2.1.1 (formerly MFDA rule 2.1.1)^[1]; and

Allegation #2:  Between January 18, 2020 and April 6, 2021, the Respondent obtained, possessed, and in some instances used to process transactions 29 pre-signed account forms in respect of 9 clients, contrary to Mutual Fund Dealer Rule 2.1.1 (formerly MFDA Rule 2.1.1).

PARTICULARS

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

Registration History

1. Since March 12, 2015, the Respondent has been registered in Saskatchewan as a dealing representative with Sun Life Financial Investment Services (Canada) Inc. (the “Dealer Member”), a Dealer Member of CIRO (formerly a Member of the MFDA).
2. At all material times, the Respondent conducted business in the Saskatoon, Saskatchewan area.

Allegation #1 – Reused Client Signatures

3. At all material times, the Member’s policies and procedures prohibited the cutting and pasting, photocopying or using liquid paper on a document to “re-use” a previous signature.
4. On April 6, 2021, the Respondent photocopied the signature pages from two account forms previously signed by a client and reused the signature pages on two account forms and submitted the forms to the Dealer Member for processing.
5. The account forms consisted of a Limited Trade Authorization Form and a Client consent to electronic delivery of documents and notices Form.
6. 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).

Pre-Signed Account Forms 

7. At all material times, the Member’s policies and procedures prohibited having a client sign a form which is blank or only partially completed.
8. Between January 18, 2020 and April 6, 2021, the Respondent obtained, possessed, and in some instances used to process transactions 29 pre-signed account forms in respect of nine clients.
9. The account forms consisted of:
   • • five Limited Trade Authorization Forms
     • 8 New Account Application Forms
     • one Client Consent to Electronic Delivery of Documents
     • one Transfer Authorization
     • one Estate Claim Form
     • six Risk Profile Questionnaires
     • seven Mutual Fund Investment Application Forms

10. On 27 of the 29 account forms, the Respondent obtained the client signatures on the account forms after emailing only the signature page to the client to obtain their signature. The Respondent received from the client the signed signature page and subsequently added it to the account forms that the Respondent completed and submitted to the Member for processing.
11. On the remaining two forms, the Respondent added Know Your Client information to the account forms after the client signed the forms, and submitted them to the Dealer Member for processing.
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 CIRO 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 CIRO;
• 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 CIRO;
• 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 Fund Dealer Division within twenty (20) days from the date of service of this Notice of Hearing.

A Reply shall be served upon Enforcement Counsel at:

Canadian Investment Regulatory Organization
Mutual Fund Dealer Division
800 – 6th Avenue SW, Suite 850
Calgary, AB T2P 3G3
Attention: Jennifer Galarneau
Email: [email protected]

A Reply shall be filed by:

1. providing 4 copies of the Reply to the Office of the Corporate Secretary, Mutual Fund Dealer Division by personal delivery, mail or courier to:

Canadian Investment Regulatory Organization
121 King Street West, Suite 1000
Toronto, ON M5H 3T9
Attention: Office of the Corporate Secretary, Mutual Fund Dealer Division; or

2. transmitting 1 electronic copy of the Reply to the Office of the Corporate Secretary, Mutual Fund Dealer Division by e-mail at [email protected].

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 CIRO in the Notice of Hearing; or
2. admit the facts alleged and conclusions drawn by CIRO 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 CIRO 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 CIRO in the Notice of Hearing as having been proven and may impose any of the penalties described in the Mutual Fund Dealer Rules.

End.