Skip to Main Content

Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 201613


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: William Way

Heard: April 28, 2016 in Toronto, Ontario
Reasons for Decision: July 28, 2016


ORAL REASONS FOR DECISION FOR ACCEPTANCE OF
SETTLEMENT AGREEMENT

Hearing Panel of the Central Regional Council:

Paul M. Moore, Q.C.
Chair

Colleen Waring
Industry Representative

Robert C. White
Industry Representative

Appearances:

Sarah Glickman
)
Counsel for the Mutual Fund Dealers

)
Association of Canada
)

)

William Way
)
In Person
)

Page 1 of 13

Background

1.
We, the Hearing Panel, are here 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 (the “MFDA”) and
William Way (the “Respondent”).

2.
The Hearing Panel has had a copy of the settlement agreement (the “Settlement
Agreement”), submissions of MFDA Staff and a book of authorities. We have had a chance to
consider the Settlement Agreement and the book of authorities and have no difficulty in
approving the Settlement Agreement. Therefore we don't need to go in camera.

Decision

3.
We approve and accept the Settlement Agreement because it is in the public interest to do
so. We direct that a copy of the Settlement Agreement be attached herein as Schedule “1”.

Reasons

4.
The penalties fall within the parameters of precedent cases and send a deterrent message
to the Respondent and to the industry in general.

Allegations

5.
The allegations against the Respondent, and to which the Respondent admits, are that the
Respondent violated the bylaws, rules or policies of the MFDA, in that between January of 2012
and May 2013, he obtained, possessed, and in some instances used to process trades 20 pre-
signed account forms in respect of 8 clients contrary to MFDA Rule 2.1.1.

Penalty

6.
Staff and the Respondent agree and consent to the following terms of the settlement:
Page 2 of 13

a) the Respondent shall pay a fine of $6,250;
b) the Respondent shall pay costs of $2,500;
c) the Respondent shall in the future comply with all MFDA Rules; and
d) the Respondent will attend in person on the date of the settlement hearing

Agreed Facts

7.
The Agreed Facts are set forth in greater detail in part three of the Settlement Agreement.

Relevant factors

8.
We have approved the Settlement Agreement taking into count the following factors
which are outlined in the Settlement Agreement and have been stressed in the submissions of
Staff which we have had a chance to consider in detail.

Breach of the Rules

9.
Breach of the Rules, regardless of the innocuous nature of the conduct, is a violation
which needs to have a consequence. The rules regarding non-use of pre-signed account forms
need to be followed in order to allow a proper audit trail and in order to assist the Member in
properly supervising its sales representatives.

No client harm

10.
There was no client harm. The clients did not complain. Indeed the Member canvased all
the clients and it appears that, if anything, the Respondent was receiving instructions from the
clients involved.

Page 3 of 13

No extraordinary or unusual profits

11.
The Respondent did not profit from his action other than the normal profits he makes as a
registered representative doing what is the normal course of business.

No fraud, moral turpitude or incompetence

12.
The conduct did not contain any fraud, or moral turpitude, or suggestion of
incompetence. It was a question of the Rules not being followed.

Past conduct

13.
There is no indication that the Respondent has had any previous disciplinary proceedings
against him by his Member or the MFDA.

Co-operation

14.
The Respondent co-operated with the Member in its investigation into his conduct. By
entering into the Settlement Agreement, the Respondent has saved the MFDA the time, resources
and expenses associated with conducting a full hearing of the allegations.

Remorse

15.
The Respondent understands the seriousness of his actions, and, through statements he
made to us this morning, it is clear that he is remorseful.

Guidelines

16.
The agreed fine is within the suggested penalties under the MFDA penalty guidelines.

Page 4 of 13

Precedents

17.
Staff provided us with a book of authorities containing many precedents, and the
penalties are within the range of penalties in similar cases.

Costs

18.
The costs of $2,500 are appropriate and reasonable in the circumstances.

This written version of the oral Reasons for Decision is
DATED this 28th day of July, 2016.

“Paul M. Moore”
Paul M. Moore, Q.C.

Chair

“Colleen Waring”
Colleen Waring

Industry Representative

“Robert C. White”
Robert C. White

Industry Representative

DM 491326 v1

Page 5 of 13

Schedule “1”
Settlement Agreement
File No. 201613


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: William Way



SETTLEMENT AGREEMENT

I.
INTRODUCTION

1.
Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent,
William Way, consent and agree to settlement of this matter by way of this agreement (the
“Settlement Agreement”).

2.
Staff conducted an investigation of the Respondent’s activities which disclosed 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.

II.
JOINT SETTLEMENT RECOMMENDATION

3.
Staff and the Respondent jointly recommend that the Hearing Panel accept the
Settlement Agreement.
Page 6 of 13

4.
The Respondent admits to the following violations of the By-laws, Rules or Policies of
the MFDA: between January 2012 and May 2013, he obtained, possessed, and in some instances,
used to process trades, 20 pre-signed account forms in respect of 8 clients contrary to MFDA
Rule 2.1.1.

5.
Staff and the Respondent agree and consent to the following terms of settlement:

(a) the Respondent shall pay a fine in the amount of $6,250 pursuant to s. 24.1.1(b) of
MFDA By-law No. 1;
(b) the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA
By-law No. 1;
(c) the Respondent shall in the future comply with all MFDA Rules, including MFDA
Rule 2.1.1; and;
(d) the Respondent will attend in person, on the date set for the Settlement Hearing.

6.
Staff and the Respondent agree to the settlement on the basis of the facts set out in Part
III herein and consent to the making of an Order in the form attached as Schedule “A”.

III.
AGREED FACTS

Registration History

7.
Since September 1997, the Respondent has been registered in Ontario as a mutual fund
salesperson (now known as a Dealing Representative) with Investors Group Financial Services
Inc. (“Investors Group”), a Member of the MFDA.

8.
A The Respondent has also been registered in Manitoba since July 2013.

Page 7 of 13

9.
The Respondent was registered as a branch manager with Investors Group from
September 2009 to January 2011. None of the misconduct in question occurred during this
period.

10.
At all material times, the Respondent conducted business in the Scarborough, Ontario
area.

Pre-Signed Account Forms

11.
At all material times, Investors Group’s policies and procedures prohibited its
Representatives, including the Respondent, from holding pre-signed account forms.

12.
Between January 2012 and May 2013, the Respondent obtained, possessed, and in some
instances, used to process trades, 20 pre-signed account forms in respect of 8 clients.

13.
The 20 pre-signed account forms, 9 of which were used, consisted of Investment
Instruction forms, Transfer Authorization forms, Know-Your-Client forms, Pre-Authorized
Contribution Agreement forms and Bank Account Change forms.

Investors Group’s Investigation

14.
Investors Group’s compliance department detected the conduct that is the subject of this
Settlement Agreement as a result of a routine audit of the Respondent’s files in October 2014.

15.
As part of its follow up investigation, the Respondent’s Branch Manager reviewed all of
the Respondent’s client files. Investors Group identified evidence that the Respondent received
instructions from all affected clients and no additional concerns.

16.
Investors Group issued a warning letter to the Respondent on December 18, 2014.

Page 8 of 13

Additional Factors

17.
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.

18.
There is no evidence of client harm.

19.
The Respondent cooperated with Investors Group’s investigation into his conduct.

20.
The Respondent understands the seriousness of his actions.

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 of the allegations.

IV.
ADDITIONAL TERMS OF SETTLEMENT

23.
This settlement is agreed upon in accordance with section 24.4 of MFDA By-law No. 1
and Rules 14 and 15 of the MFDA Rules of Procedure.

24.
The Settlement Agreement is subject to acceptance by the Hearing Panel which shall be
sought at a hearing (the “Settlement Hearing”). At, or following the conclusion of, the
Settlement Hearing, the Hearing Panel may either accept or reject the Settlement Agreement.

25.
The Settlement Agreement shall become effective and binding upon the Respondent and
Staff as of the date of its acceptance by the Hearing Panel. Unless otherwise stated, any
monetary penalties and costs imposed upon the Respondent are payable immediately, and any
suspensions, revocations, prohibitions, conditions or other terms of the Settlement Agreement
shall commence, upon the effective date of the Settlement Agreement.

Page 9 of 13


26.
Staff and the Respondent agree that if this Settlement Agreement is accepted by the
Hearing Panel:

a) the Settlement Agreement will constitute the entirety of the evidence to be submitted
respecting the Respondent in this matter;
b) the Respondent waives any 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;
c) Staff will not initiate any proceeding under the By-laws of the MFDA against the
Respondent in respect of the facts and the contraventions described in this Settlement
Agreement. 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 this Settlement Agreement. Furthermore, nothing in this Settlement Agreement
shall relieve the Respondent from fulfilling any continuing regulatory obligations;
d) 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; and
e) 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 the
Respondent.

27.
If, for any reason, this Settlement Agreement is not accepted 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 the Settlement Agreement or the settlement negotiations.

Page 10 of 13

28.
Staff and the Respondent agree that the terms of the 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.

29.
The Settlement Agreement may be signed in one or more counterparts which together
shall constitute a binding agreement. A facsimile copy of any signature shall be effective as an
original signature.

DATED this 29th day of January, 2016.

“JAW”

“William Way”
Witness – Signature

William Way

JAW
Witness – Print name

“Shaun Devlin”

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

Page 11 of 13

Schedule “A”
Order
File No. 201613

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: William Way



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
William Way (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
May 2013, the Respondent obtained, possessed, and in some instances, used to process
transactions, 20 pre-signed account forms in respect of 8 clients;

Page 12 of 13

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 $6,250 pursuant to s. 24.1.1(b) of
MFDA By-law No. 1;

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

3.
The Respondent shall in future comply with all MFDA Rules, including MFDA Rule
2.1.1; and

4.
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: __________________________

[Name of Public Representative], Chair

Per: _________________________

[Name of Industry Representative]

Per: _________________________

[Name of Industry Representative]

Page 13 of 13