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Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 201328



IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA


Re: Adeolu Akinbola Durotoye


Heard: April 16, 2014, in Toronto, Ontario
Reasons for Decision: May 20, 2014

REASONS FOR DECISION

Hearing Panel of the Central Regional Council:

The Hon. Edward Saunders, Q.C.
Chair

Robert Guilday
Industry Representative

David W. Kerr
Industry Representative

Appearances:

Lyla Simon
)
Enforcement Counsel, Mutual Fund Dealers

)
Association of Canada
)

Adeolu Akinbola Durotoye
)
Respondent, in attendance by teleconference
)

)

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1.
This is a hearing to determine whether a settlement agreement (the “Settlement
Agreement”) dated February 14, 2014 between Adeolu Akinbola Durotoye (the “Respondent”)
and the Mutual Fund Dealers Association of Canada (“MFDA”) should be accepted pursuant to
Section 24.4 of By-law No. 1 of the MFDA.

2.
In paragraph 17 of the Settlement Agreement the Respondent admits that:

a) from April 2008 to March 2011, he obtained and used 5 partially completed or
whited-out pre-signed forms to complete 3 transactions for 3 clients, contrary to
MFDA Rule 2.1.1; and
b) from July 2009 to June 2011, in his capacity as Branch Manager, he reviewed and
approved 30 blank or partially completed pre-signed account forms and account
forms altered with white-out, contrary to MFDA Rules 2.5.5(d) (now Rule 2.5.5(f)
and Rule 2.1.1.

3.
The use of blank, partially completed or whited-out pre-signed forms to process
transactions is a serious breach of the MFDA Rules. The circumstances here are similar to those
in Sowunmi (MFDA File 201328-1) with one important distinction. Here the Respondent was a
Branch Manager who would be expected to know better. A Branch Manager should set an
example. As counsel for the MFDA put it, he should be a “standard bearer” for compliance.

4.
The Respondent has been in the industry for over 6 years and was a Branch Manager for
nearly 2 of those years. He has no previous disciplinary history. There is no evidence of
misappropriation, unauthorized trading, client harm or client complaint. The Respondent
received no financial benefit from engaging in the misconduct. The Respondent has co-operated
with the investigation and has accepted responsibility for his actions. He has lost his position as
Branch Manager but remains an Approved person engaged by the Member.

5.
In the Settlement Agreement, the Respondent agreed to the following terms:

a) the Respondent shall be prohibited from acting as a Branch Manager for a period of
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six months commencing from the date of the final Order herein, pursuant to Section
24.1.1(e) of By-law No. 1;

b) the Respondent shall pay a fine in the amount of $2,500 pursuant to Section 24.1.1(b)
of By-law No. 1;

c) the Respondent shall pay costs in the amount of $2,500 pursuant to Section 24.2 of
By-law No. 1;

d) the Respondent shall pay the $5,000 total (attributable to the fine amount and costs
amount) as follows:

i.
$500 payable upon approval of the settlement herein;
ii.
$500 per month thereafter, on or before the 30th day of each month following
the date of the Order accepting the Settlement Agreement;

e) if the respondent fails to comply with paragraph 5(d), then without further notice to
the Respondent, the Respondent shall summarily be permanently prohibited from
conducting securities related business in any capacity while in the employ of or
associated with any MFDA Member, pursuant to Section 24.1.1(e) of By-law No. 1;

f) the Respondent shall in future comply with MFDA Rules 1.1.2, 2.5.1, 2.5.5(f) and
Rule 2.1.1; and

g) the Respondent shall attend at the Settlement Hearing by teleconference or in person.

6.
The Panel was advised that the sum of $500 has already been paid and is held in escrow
pending acceptance of the Settlement Agreement

7.
Again, as in the case of Sowunmi, we find the Settlement Agreement acceptable. The
penalty is more onerous than in the case of Sowunmi to reflect the fact that the Respondent was a
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Branch Manager. In our view, it is a reasonable and proportionate settlement having regard to
the conduct of the Respondent.

DATED this 20th day of May, 2014.

“Edward Sanders”

The Hon. Edward Sanders, Q.C.
Chair

“Robert Guilday”

Robert Guilday
Industry Representative

“David W. Kerr”

David W. Kerr
Industry Representative

DM 378061 v2

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