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Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 200920



IN THE MATTER OF A DISCIPLINARY HEARING
PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEARLERS ASSOCIATION OF CANADA

Re: Mark Kricievski


Heard: December 7, 2009 in Toronto, Ontario
Reasons for Decision: December 15, 2009


REASONS FOR DECISION


Hearing Panel of the Central Regional Council:

The Hon. John B. Webber, Q.C.

Chair
Christopher
Marrese

Industry
Representative
Anne
Traczuk

Industry
Representative

Appearances:

Shelly Feld
)
For the Mutual Fund Dealers Association of Canada
)

Mark Kricievski
)
Attended Personally
)
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1.
A Notice of Settlement Hearing, dated November 24, 2009, directed a hearing before a
Hearing Panel of the Ontario Regional Council of the Mutual Fund Dealers Association of
Canada (“MFDA”) on Monday, December 7, 2009, commencing at 10:00 a.m., in the hearing
room located at 121 King Street West, Suite 1000, Toronto, Ontario.

2.
The hearing was to consider whether, pursuant to Sections 20 and 24.1.1 of MFDA By-
law No. 1, the Panel should accept a Settlement Agreement, entered into by Staff of the MFDA
and the Respondent Mark Kricievski, dated November 20, 2009. The proposed Settlement
Agreement between Staff of the MFDA and Mark Kricievski involved matters for which Mr.
Kricievski may be disciplined by the Regional Council pursuant to the MFDA by-laws.

3.
Mr. Kricievski appeared without counsel. He advised the panel that he did not require
counsel. He was prepared to proceed on the date of the hearing and, accordingly, the matter
proceeded.

4.
At the outset of the proceedings, we considered a joint motion by Staff and the
Respondent to move the proceedings “in camera”. We granted that motion. We then considered,
in detail, the provisions of the Settlement Agreement itself. We heard submissions as to the
applicable law which should guide this panel to determine whether to accept or reject the
Settlement Agreement. We next heard submissions as to why this particular Settlement
Agreement met the appropriate criteria. We then retired to consider both the Settlement
Agreement and the applicable legal principles. After deliberation, we unanimously concluded
that it was appropriate to accept the Settlement Agreement. As a Panel, we are obviously
concerned with the type of conduct which is reflected in the Settlement Agreement. We believe
that the Settlement Agreement fairly addresses the concerns that we have.

5.
In determining whether the Settlement Agreement should be accepted, we have
considered a number of factors. These factors include the following:

a. We have considered the public interest and whether, in our view, the penalty imposed
will protect investors.
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b. We have considered whether, in our view, the Settlement Agreement is reasonable and
proportionate, having regard to the conduct of the Respondent as set out in the
Settlement Agreement.

c. We have considered whether, in our view, the Settlement Agreement addresses the
issues of both specific and general deterrence.

d. We have considered whether, in our view, the proposed settlement will prevent the
type of conduct, which is set out in the Settlement Agreement, from occurring again
in the future and, in particular, the existence of a cease trade order of February 2,
2005 issued by the Ontario Securities Commission requiring Portus Alternative
Management Inc. (“Portus”) and its affiliates to cease trading in securities because of
the apparent breaches of the Securities Act, R.S.O. 1990. The Respondent was
registered as a mutual fund salesperson with Sterling Mutuals Inc. (“Sterling”). He
sold, referred or facilitated the sale of approximately $1.8 million of Portus
investment products to 44 clients. None of these transactions were carried on for the
account of Sterling or processed through the facilities of Sterling.

6.
The Respondent was paid a sales commission of $72,000 for his involvement. He rebated
to the clients approximately one-half or $36,000. We were advised that all of the investors in
Portus recovered up to well in excess of 90 percent of their loss.

7.
We have considered whether, in our view, the Settlement Agreement will foster
confidence in the integrity of the Canadian capital markets.

8.
We have considered whether, in our view, the Settlement Agreement will foster
confidence in the integrity of the MFDA.

9.
Finally, we have considered whether, in our view, the Settlement Agreement will foster
confidence in the regulatory process itself.

10.
In our view, the Settlement Agreement addresses all of the above factors. We believe that
each and every one of these factors is dealt with in an appropriate fashion by the Settlement
Agreement.

11.
In addition, we have carefully reviewed the MFDA penalty guidelines and the effect of
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these guidelines on the type of conduct in this matter. We believe that, in a hearing of this nature,
it is appropriate to consider any and all mitigating factors. A number of these factors are set out
below, as taken from the written submissions of Staff of the MFDA and made during oral
presentations.

a. The Respondent was disciplined by Sterling which imposed a fine upon the
Respondent.

b. Sterling placed the Respondent under strict supervision for a period of one year and
reduced his share of commissions earned from sales of investment products.

c. The Respondent has cooperated fully with the investigations conducted by Sterling
and by MFDA Staff.

d. The Respondent has limited sources of income and is unemployed. He will be 60
years of age in December 2009. He has experienced macular degeneration and
cataracts in both eyes and will soon be undergoing surgery for his medical condition.
It is his submission that, because of his medical condition, he can no longer be
gainfully employed.

e. The Respondent completely admitted his contraventions involving the Portus
investment product in contravention of Sterling’s written direction and subsequent
oral direction that he refrain from selling, referring or facilitating the sale of
investment products offered by Portus. He fully admitted that he sent communications
to clients which were untrue and misleading, with unjustified promises of specific
results. He failed to fairly present the potential risks that were actually detrimental to
the interests of clients.

12.
We have finally considered that this was a Settlement Agreement that was reached by the
parties after significant discussion and negotiation. The Settlement Agreement represents what
they feel, with their knowledge and their experience, is an appropriate resolution. In our view,
notwithstanding the quantum of the fine, the Settlement Agreement is reasonable and in the
public interest.

13.
For all of these reasons, we accepted the Settlement Agreement and signed the
appropriate order as presented at the hearing. We indicated to counsel and the Respondent that
these reasons would follow upon signing of the order.

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DATED at Toronto, this 15th day of December, 2009.

“John
Webber”
The Hon. John B. Webber, Q.C., Chair

“Christopher Marrese”

Christopher Marrese, Industry Representative

“Anne
Traczuk”

Anne Traczuk, Industry Representative

Doc 196269

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