Hearing Panel of the Central Regional Council:
- Paul M. Moore, QC, Chair
- Kenneth P. Mann, Industry Representative
Thomas Ng, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Gerald Raymond Letourneau, Respondent, in person
- The Hearing Panel accepted the settlement agreement dated August 27, 2018 (“Settlement Agreement”) between the staff of the MFDA and Gerald Raymond Letourneau (“Respondent”). A copy of the Settlement Agreement is attached to these Reasons as Appendix “A”. The agreed facts are set out in Section III of the settlement Agreement.
- The Respondent admitted that:
- between January 2011 and February 2017, he obtained, possessed, and in some instances, used to process transactions, 68 pre-signed account forms in respect of 38 clients, contrary to MFDA Rule 2.1.1; and
- between January 2011 and February 2017, he falsified 10 account forms in respect of 10 clients by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1.
- The agreed penalties were: i) a fine of $16,000; and ii) a costs award of $2,500.
- See also paragraph 7 of these reasons.
- The Hearing Panel determined that it had to be satisfied regarding three considerations before it could accept the Settlement Agreement. First, the agreed penalty had to be within an acceptable range taking into account similar cases. Secondly, the agreed penalty had to be fair and reasonable (i.e. proportional to the seriousness of the contravention and taking into consideration other relevant circumstances) and should appear to be so to members of the public and industry. Thirdly, the agreed penalty should serve as a deterrent to the Respondent and to industry. To be satisfied on these three considerations required an understanding of the particular facts of the case, the circumstances of the Respondent, and the impact on the Respondent of the agreed penalty.
Nature of the Misconduct
- Obtaining, possessing, and using pre-signed account forms and altering account forms without having the clients initial the alterations are conduct contrary to the referenced rule.
Other considerations in determining acceptability of agreed penalties
- The was no evidence that the Respondent received any financial benefit from engaging in the misconduct beyond any commissions and fees that he would normally be entitled to receive if the transactions had been carried out in the proper manner.
- There was no evidence of client loss or lack of client authorization.
- The Respondent has not previously been subject to MFDA disciplinary proceedings.
- By entering into the 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.
- The agreed penalties are within the recommendations of the MFDA penalty guidelines and the reasonable range of appropriateness with regard to MFDA decisions submitted to us by staff and Respondent’s counsel, made by MFDA Hearing Panels in similar circumstances. They are fair and reasonable and will serve as a specific and general deterrent.
- The costs award is reasonable.
- We concluded that the Settlement Agreement was in the public interest and, consequently, we accepted it.
Paul M. Moore, QCPaul M. Moore, QCChair
Kenneth P. MannKenneth P. MannIndustry Representative