Skip to Main Content

Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 201562


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: Grant Wilson

Heard: February 25, 2016 in Toronto, Ontario
Reasons for Decision: May 16, 2016


ORAL REASONS FOR DECISION FOR ACCEPTANCE OF
SETTLEMENT AGREEMENT

Hearing Panel of the Central Regional Council:

Paul M. Moore, Q.C.
Chair

Patrick Galarneau
Industry Representative

Brigitte Geisler
Industry Representative

Appearances:

Sarah Glickman
)
Counsel for the Mutual Fund Dealers

)
Association of Canada
)

)

Natalia Vandervoort
)
Counsel for the Respondent
Rob Brush
)

Page 1 of 16

1.
We are here in the matter of a Settlement Hearing pursuant to section 24 of By-law No. 1
of the Mutual Fund Dealers Association of Canada (“MFDA”) in the matter of Grant Wilson (the
“Respondent”).

Reasons

2.
We approve the settlement agreement (the Settlement Agreement”) as being in the public
interest in that the agreed penalties are within a reasonable range of appropriateness, based on all
the factors; therefore, we accept the Settlement Agreement, a copy of which is attached as
Schedule 1.

3.
The contravention in this matter is that the Respondent, between January 2012 and
February 2014, obtained, possessed, and in some instances, used to process transactions, 20 pre-
signed account forms in respect of six clients, contrary to MFDA Rule 2.1.1.

4.
The agreed penalties are that the Respondent shall pay a fine of $5,000 pursuant to
section 24.1.1(b) of MFDA By-law No. 1, and the Respondent shall pay costs of $2,500
pursuant to section 24.2 of MFDA By-law No. 1.

5.
The agreed facts are set out in greater detail in section IV of the Settlement Agreement.

6.
Staff took into account various factors in agreeing on penalty and the Panel want to
mention a few of them:

Nature of the misconduct

7.
The use of pre-signed account forms is a serious breach of MFDA Rule 2.1.1 as indicated
by various cases.

Page 2 of 16

Client harm

8.
There is no evidence of client harm or lack of authorization. The Member sent letters to
all clients serviced by the Respondent in order to determine whether the Respondent engaged in
any unauthorized trading in their accounts. No clients reported any concerns to the Member.

Benefits received by the Respondent

9.
There is no evidence that the Respondent received any financial benefit from engaging in
the misconduct at issue in this proceeding, other than the commissions and fees he would
ordinarily be entitled to receive had the transactions been carried out in the proper manner.

Respondent's experience and level of activity in the capital markets

10.
The Respondent has been registered in the mutual fund industry since 1996. He is an
experienced dealing representative and ought to have known and respected the compliance
requirements of the Member and the MFDA.

Deterrence

11.
A fine of $5,000 and costs of $2,500 are significant and help the MFDA send a message
to the Respondent and others in the capital markets with regard to the seriousness of the
misconduct at issue.

Respondent's past conduct

12.
The Respondent has not previously been subject to MFDA disciplinary proceedings.

Respondent's recognition of the seriousness of misconduct

13.
By entering into this Settlement Agreement, the Respondent has accepted responsibility
for his misconduct and avoided the necessity of the MFDA incurring the time and expense of
conducting a full disciplinary hearing, and he is present today.

Page 3 of 16


Penalty guidelines

14.
The proposed fine of $5,000 is consistent with the MFDA penalty guidelines. The penalty
guidelines suggest a minimum fine of $5,000 for a Rule 2.1.1 violation.

Precedents

15.
We have considered previous decisions made in similar circumstances by MFDA hearing
panels, including: Shaw (Re), [2014] MFDA Central Regional Council, File No. 201437; Weller
(Re) [2015] MFDA Central Regional Council, File No. 21544, and the other cases set out in
Staff's Book of Authorities. The agreed penalties are within the reasonable range of
appropriateness with regard to other decisions made by MFDA hearing panels in similar
circumstances.

16.
An award of costs against the Respondent in the amount of $2,500 is appropriate in the
circumstances.

17.
For these reasons, we have accepted the Settlement Agreement.

This written version of the oral Reasons for Decision is
DATED this 16th day of May, 2016.

“Paul M. Moore”
Paul M. Moore, Q.C.

Chair

“Patrick Galarneau”
Patrick Galarneau

Industry Representative

Page 4 of 16


“Brigitte Geisler”
Brigitte Geisler

Industry Representative

DM 481690 v1

Page 5 of 16

Schedule “1”
Settlement Agreement
File No. 201562


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: Grant Wilson



SETTLEMENT AGREEMENT

I.
INTRODUCTION

1.
By Notice of Settlement Hearing, the Mutual Fund Dealers Association of Canada (the
“MFDA”) will announce that it proposes to hold a hearing to consider whether, pursuant to
section 24.4 of By-law No. 1, a hearing panel of the Central Regional Council (the “Hearing
Panel”) of the MFDA should accept the settlement agreement (the “Settlement Agreement”)
entered into between Staff of the MFDA (“Staff”) and the Respondent, Grant Wilson.

II.
JOINT SETTLEMENT RECOMMENDATION

2.
Staff conducted an investigation of the Respondent’s activities. The investigation
disclosed that the Respondent had engaged in activity for which the Respondent could be
penalized on the exercise of the discretion of the Hearing Panel pursuant to s. 24.1 of By-law No.
1.
Page 6 of 16

3.
Staff and the Respondent recommend settlement of the matters disclosed by the
investigation in accordance with the terms and conditions set out below. The Respondent agrees
to the settlement on the basis of the facts set out in Part IV herein and consents to the making of
an Order in the form attached as Schedule “A”.

4.
Staff and the Respondent agree that the terms of this Settlement Agreement, including the
attached Schedule “A”, will be released to the public only if and when the Settlement Agreement
is accepted by the Hearing Panel.

III.
ACKNOWLEDGEMENT

5.
Staff and the Respondent agree with the facts set out in Part IV herein for the purposes of
this Settlement Agreement only and further agree that this agreement of facts is without
prejudice to the Respondent or Staff in any other proceeding of any kind including, but without
limiting the generality of the foregoing, any proceedings brought by the MFDA (subject to Part
XI) or any civil or other proceedings which may be brought by any other person or agency,
whether or not this Settlement Agreement is accepted by the Hearing Panel.

IV.
AGREED FACTS

Registration History

6.
The Respondent has been registered in the mutual fund industry since 1996.

7.
Since September 2006, the Respondent has been registered as a mutual fund salesperson
in Ontario (now known as a Dealing Representative) with FundEX Investments Inc.
(“FundEX”), a member of the MFDA.

8.
At all material times, the Respondent conducted business in the Scarborough, Ontario,
area.
Page 7 of 16


Pre-Signed Account Forms

9.
At all material times, FundEX’s policies and procedures prohibited its representatives,
including the Respondent, from obtaining, possessing or using, blank or partially incomplete pre-
signed forms.

10.
Between January 2012 and February 2014, the Respondent obtained, maintained, and in
some instances, used to process transactions, a total of 20 pre-signed account forms in respect of
6 clients.

11.
The 20 pre-signed account forms included order entry forms and Know-Your-Client
update forms, 6 of which were used by the Respondent to process trades.

12.
The Respondent had not obtained limited trade authorizations for any of the transactions
set out above at paragraphs 10 and 11.

FundEX’s Investigation

13.
FundEX’s compliance staff detected the conduct that is the subject of this Settlement
Agreement as a result of a compliance review of the Respondent’s client files on April 1, 2014.

14.
As part of its investigation, FundEX sent letters to all clients serviced by the Respondent
to determine whether the Respondent has engaged in any unauthorized trading in their accounts.
None of the clients reported any concerns to FundEX.

15.
There is no evidence that the transactions in question were not authorized by the clients.

16.
On July 17, 2014, the Respondent provided a written statement to FundEX in which he
explained that the pre-signed account forms were used for the purposes or efficiency and to
reduce the length of client meetings.

Page 8 of 16

17.
The Respondent states that his actions coincided with a period of significant health
problems, including a traumatic brain injury and post-traumatic stress disorder. The Respondent
switched to a part-time work schedule during this period due to his medical issues.

18.
FundEX placed the Respondent under strict supervision for the period of April 28, 2014
to March 30, 2015.

Additional Factors

19.
There is no evidence that the Respondent received any financial benefit from engaging in
the misconduct described above beyond the commissions and fees that he would ordinarily be
entitled to receive had the transactions been carried out in the proper manner.

20.
The Respondent cooperated with FundEX’s investigation into his conduct.

21.
The Respondent has not previously been the subject of MFDA disciplinary proceedings.

22.
By entering into this Settlement Agreement, the Respondent has saved the MFDA the
time, resources and expenses associated with conducting a full hearing on the allegations.

V.
CONTRAVENTIONS

23.
The Respondent admits that between January 2012 and February 2014, the Respondent
obtained, maintained, and in some instances, used to process transactions, a total of 20 pre-
signed account forms in respect of 6 clients, contrary to MFDA Rule 2.1.1.

VI.
TERMS OF SETTLEMENT

24.
The Respondent agrees to the following terms of settlement:

Page 9 of 16

a) the Respondent shall pay a fine in the amount of $5,000 pursuant to s. 24.1.1(b) of
MFDA By-law No. 1 (the “Fine”);
b) the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA
By-law No. 1 (“Costs”);
c) the Fine and Costs shall be payable in 5 installments of $1,500 each, the first of which
shall be paid on the date of the settlement hearing, the remaining four installments
payable on or before the final business day of the four months that follow the date of
the acceptance of the settlement agreement by the Hearing Panel;
d) if the Respondent fails to make any of the installment payments described in
subparagraphs (a)-(c), above, when the payments become due, then without further
notice to the Respondent, the Respondent shall summarily be suspended from
conducting securities related business in any capacity while in the employ of, or
associated with, any MFDA Member, until the full amount of the Fine and Costs have
been paid;
e) the Respondent shall in the future comply with MFDA Rule 2.1.1; and
f) the Respondent will attend in person, on the date set for the Settlement Hearing.

VII.
STAFF COMMITMENT

25.
If this Settlement Agreement is accepted by the Hearing Panel, Staff will not initiate any
proceeding under the By-laws of the MFDA against the Respondent in respect of the facts set out
in Part IV and the contraventions described in Part V of this Settlement Agreement, subject to
the provisions of Part XI below. Nothing in this Settlement Agreement precludes Staff from
investigating or initiating proceedings in respect of any facts and contraventions that are not set
out in Parts IV and V of this Settlement Agreement or in respect of conduct that occurred outside
the specified date ranges of the facts and contraventions set out in Parts IV and V, whether
known or unknown at the time of settlement. Furthermore, nothing in this Settlement Agreement
shall relieve the Respondent from fulfilling any continuing regulatory obligations.

Page 10 of 16

VIII. PROCEDURE FOR APPROVAL OF SETTLEMENT

26.
Acceptance of this Settlement Agreement shall be sought at a hearing of the Central
Regional Council of the MFDA on a date agreed to by counsel for Staff and the Respondent.

27.
Staff and the Respondent may refer to any part, or all, of the Settlement Agreement at the
settlement hearing. Staff and the Respondent also agree that if this Settlement Agreement is
accepted by the Hearing Panel, it will constitute the entirety of the evidence to be submitted
respecting the Respondent in this matter, and the Respondent agrees to waive his rights to a full
hearing, a review hearing before the Board of Directors of the MFDA or any securities
commission with jurisdiction in the matter under its enabling legislation, or a judicial review or
appeal of the matter before any court of competent jurisdiction.

28.
Staff and the Respondent agree that if this Settlement Agreement is accepted by the
Hearing Panel, then the Respondent shall be deemed to have been penalized by the Hearing
Panel pursuant to s. 24.1.2 of By-law No. 1 for the purpose of giving notice to the public thereof
in accordance with s. 24.5 of By-law No. 1.

29.
Staff and the Respondent agree that if this Settlement Agreement is accepted by the
Hearing Panel, neither Staff nor the Respondent will make any public statement inconsistent with
this Settlement Agreement. Nothing in this section is intended to restrict the Respondent from
making full answer and defence to any civil or other proceedings against him.

IX.
FAILURE TO HONOUR SETTLEMENT AGREEMENT

30.
If this Settlement Agreement is accepted by the Hearing Panel and, at any subsequent
time, the Respondent fails to honour any of the Terms of Settlement set out herein, Staff reserves
the right to bring proceedings under section 24.3 of the By-laws of the MFDA against the
Respondent based on, but not limited to, the facts set out in Part IV of the Settlement Agreement,
as well as the breach of the Settlement Agreement. If such additional enforcement action is
taken, the Respondent agrees that the proceedings may be heard and determined by a hearing

Page 11 of 16

panel comprised of all or some of the same members of the hearing panel that accepted the
Settlement Agreement, if available.

X.
NON-ACCEPTANCE OF SETTLEMENT AGREEMENT

31.
If, for any reason whatsoever, this Settlement Agreement is not accepted by the Hearing
Panel or an Order in the form attached as Schedule “A” is not made by the Hearing Panel, each
of Staff and the Respondent will be entitled to any available proceedings, remedies and
challenges, including proceeding to a disciplinary hearing pursuant to sections 20 and 24 of By-
law No. 1, unaffected by this Settlement Agreement or the settlement negotiations.

32.
Whether or not this Settlement Agreement is accepted by the Hearing Panel, the
Respondent agrees that he will not, in any proceeding, refer to or rely upon this Settlement
Agreement or the negotiation or process of approval of this Settlement Agreement as the basis
for any allegation against the MFDA of lack of jurisdiction, bias, appearance of bias, unfairness,
or any other remedy or challenge that may otherwise be available.

XI.
DISCLOSURE OF AGREEMENT

33.
The terms of this Settlement Agreement will be treated as confidential by the parties
hereto until accepted by the Hearing Panel, and forever if, for any reason whatsoever, this
Settlement Agreement is not accepted by the Hearing Panel, except with the written consent of
both the Respondent and Staff or as may be required by law.

34.
Any obligations of confidentiality shall terminate upon acceptance of this Settlement
Agreement by the Hearing Panel.

XII.
EXECUTION OF SETTLEMENT AGREEMENT

35.
This Settlement Agreement may be signed in one or more counterparts which together
shall constitute a binding agreement.

Page 12 of 16


36.
A facsimile copy of any signature shall be effective as an original signature.

DATED this 18th day of November, 2015.

“Debbie Wilson”

“Grant Wilson”
Witness – Signature

Grant Wilson

Debbie Wilson
Witness – Print name

“Shaun Devlin”

Staff of the MFDA
Per: Shaun Devlin
Senior Vice-President,
Member Regulation – Enforcement

Page 13 of 16

Schedule “A”
Order
File No. 201562

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: Grant Wilson



ORDER



WHEREAS on [date], the Mutual Fund Dealers Association of Canada (the “MFDA”)
issued a Notice of Settlement Hearing pursuant to section 24.4 of By-law No. 1 in respect of
Grant Wilson (the “Respondent”);

AND WHEREAS the Respondent entered into a settlement agreement with Staff of the
MFDA, dated [date] (the “Settlement Agreement”), in which the Respondent agreed to a
proposed settlement of matters for which the Respondent could be disciplined pursuant to ss. 20
and 24.1 of By-law No. 1;

AND WHEREAS the Hearing Panel is of the opinion that between January 2012 and
February 2014, the Respondent obtained, maintained, and in some instances, used to process
transactions, a total of 20 pre-signed account forms in respect of 6 clients, contrary to MFDA
Rule 2.1.1.
Page 14 of 16

IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a
consequence of which:

1.
The Respondent shall pay a fine in the amount of $5,000 pursuant to s. 24.1.1.(b) of
MFDA By-law no. 1 (the “Fine”);

2.
The Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA
By-law No. 1 (“Costs”);

3.
The Fine and Costs shall be payable pursuant to 5 installments of $1,500 each, the first of
which shall be paid on the date of the settlement hearing, the remaining four installments payable
on or before the final business day of the four months that follow the acceptance of the
settlement agreement by the Hearing Panel;

4.
If the Respondent fails to make any of the installment payments ordered in paragraphs 1-
3, above, when the payments become due, then without further notice to the Respondent, the
Respondent shall summarily be suspended from conducting securities related business in any
capacity while in the employ of, or associated with, any MFDA Member, until the full amount of
the Fine and Costs have been paid;

5.
The Respondent shall in future comply with MFDA Rule 2.1.1; and

6.
If at any time a non-party to this proceeding requests production of, or access to, any
materials filed in, or the record of, this proceeding, including all exhibits and transcripts, then the
MFDA Corporate Secretary shall not provide copies of, or access to, the requested documents to
the non-party without first redacting from them any and all intimate financial or personal
information, pursuant to Rules 1.8(2) and (5) of the MFDA Rules of Procedure.


DATED this [day] day of [month], 20[ ].

Per: __________________________
Page 15 of 16


[Name of Public Representative], Chair

Per: _________________________

[Name of Industry Representative]

Per: _________________________

[Name of Industry Representative]

Page 16 of 16