Notice of Settlement Hearing

PARTICULARS

1. The proposed Settlement Agreement concerns allegations that:
   1. Between August 2010 and April 2014, the Respondent failed to respond, or provided untimely, incomplete or inadequate responses, to requests for information and documents requested by Staff during the course of compliance examinations, contrary to MFDA Rules 1.2.5(a)(iii) and 2.1.1.
   2. Between September 2009 and April 2014, the Respondent failed to establish, implement and maintain adequate policies and procedures to supervise leveraging recommendations and ensure the suitability of leveraging recommendations made by Approved Persons to clients, contrary to MFDA Rules 2.2.1, 2.5 and 2.10 and MFDA Policy No. 2.
   3. Commencing October 2011, the Respondent failed to conduct a historical leveraging review of the Respondent’s leveraged client accounts to identify and correct deficiencies identified by Staff relating to those leveraged client accounts, contrary to MFDA Rules 1.2.5(a)(iii), 2.2.1 and 2.1.1.
   4. Between September 2009 and July 2015, the Respondent failed to implement a supervisory structure for the Respondent compliant with the requirements set out in MFDA Policies No. 2 and 5, and failed to effectively discharge the supervisory obligations prescribed by MFDA Rule 2.5, contrary to MFDA Rules 2.5 and MFDA Policies No. 2 and 5, and the Order dated July 8, 2014.
   5. Between, August 2010 and April 2014, the Respondent failed to regularly update the Respondent’s policies and procedures manual, contrary to MFDA Rule 2.10 and MFDA Policy No. 2.
   6. Between March 2010 and July 2015, the Respondent failed to implement a Branch Review Program compliant with the requirements set out in MFDA Policy No. 5.
   7. Between March 2010 and July 2015, the Respondent failed to adequately detect and query patterns in the Know-Your-Client information collected from clients by three Approved Persons: EYCQ, MF and HHYZ, contrary to MFDA Rule 2.2.1 and MFDA Policy No. 2.
   8. Between March 2010 and July 2015, the Respondent failed to conduct sufficient supervisory activities of its Approved Persons’ outside business activities, contrary to MFDA Rule 1.2.1(c).

2. The hearing is open to the public, unless and to the extent that the Hearing Panel determines that all or part of the hearing should proceed in the absence of the public. If the Hearing Panel accepts the Settlement Agreement, then copies of the decision of the Hearing Panel and the Settlement Agreement will be made available to the public.