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Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 201343



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: Duane Roy


Heard: March 6, 2013 in Toronto, Ontario
Reasons for Decision: March 24, 2014

REASONS FOR DECISION

Hearing Panel of the Central Regional Council:

Paul M. Moore, Q.C.
Chair

Linda J. Anderson
Industry Representative

Brian Nowak
Industry Representative

Appearances:

Maria L. Abate
)
Enforcement Counsel, Mutual Fund Dealers

)
Association of Canada
)

Duane Roy
)
Respondent, in person
)

)

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Allegations

1.
The Settlement Agreement concerns allegations that the Respondent, between 2007 and
2012, maintained and used to complete transactions, 57 account forms involving 21 clients
where the account forms were blank or only partially complete at the time the Respondent
arranged for the clients to sign them, or the Respondent falsified the clients’ signatures on the
account forms, contrary to MFDA Rule 2.1.1.

Decision

2.
The panel agreed that the conduct in question constituted a contravention of MFDA Rule
2.1.1 and accepted and approved the Settlement Agreement as being in the public interest.

Terms of Settlement

3.
The Respondent agreed to the following terms of settlement:

a) a fine of $5,000;
b) costs of $2,500; and
c) the Respondent will attend the settlement hearing.

Facts

4.
The Respondent was registered in Ontario as a mutual fund salesperson from January 12
2001 to January 16, 2007 with FundEX Investments Inc. and from February 15, 2007 to July 16,
2012 with Ten Star Financial Inc., a Member of the MFDA. On July 16, 2012 his Member
terminated him as a result of the events in question.

5.
The Respondent’s Member contacted clients affected by the Respondent’s conduct to
determine if the Respondent had engaged in any unauthorized transactions. None of the clients
complained with respect to the events.

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Considerations Relevant to Sanctions

6.
The MFDA Penalty Guidelines recommend a minimum fine of $5,000 for a case like this
one.

7.
There was no fraud or unauthorized trading on the part of the Respondent. The clients
were aware of the transactions which were completed on their behalf.

8.
The Respondent has not been previously disciplined.

9.
The Respondent is no longer registered in the securities industry in any capacity and has
indicated that he will likely not return to mutual fund sales.

10.
The MFDA is not aware of any instance of client harm as a result of the Respondent’s
conduct.

11.
The Respondent has cooperated with the MFDA in its investigation.

12.
Generally, a lesser penalty is warranted where there is clear evidence that the client
requested or acquiesced in the use of pre-signed forms.

13.
While the Respondent purported to sign the client’s name in some of the instances, he did
not do so with the intention of depriving the client of property or rights. Although this was
wrong, it was not with fraudulent or dishonest intent.

Procedure

14.
The Respondent was not represented by counsel.

15.
At the commencement of the hearing, on motion by Staff, supported by the Respondent,
the hearing went in camera until we announced that we had accepted and approved the
Settlement Agreement.
Page 3 of 4

Shortened References

16.
In these reasons:

a) “Respondent” refers to Duane Roy.
b) “Settlement Agreement” refers to the settlement agreement dated December 5, 2013
between the MFDA and the Respondent.
c) “MFDA” refers to the Mutual Fund Dealers Association of Canada.


DATED
this 24th day of March, 2014.

“Paul M. Moore”

Paul M. Moore, Q.C.,
Chair

“Linda J. Anderson”

Linda J. Anderson,
Industry Representative

“Brian Nowak”

Brian Nowak,
Industry Representative

DM 372848 v1
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