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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: Collin John Spithoff

Heard: June 3, 2021 by electronic hearing in Toronto, Ontario
Reasons For Decision: June 10, 2021

Reasons For Decision

Hearing Panel of the Central Regional Council:

  • Paul M. Moore, Q.C., Chair
  • Brigitte J. Geisler, Industry Representative

Appearances:

Alan Melamud, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Collin John Spithoff, Respondent

Settlement Agreement

  1. The Hearing Panel accepted the settlement agreement dated February 26, 2021 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Collin John Spithoff (“Respondent”) at an electronic settlement hearing held in accordance with MFDA rules for an electronic hearing.
  2. A copy of the Settlement Agreement is attached to these Reasons as Schedule “1”. The agreed facts are set out in section IV of the Settlement Agreement.

Contraventions

  1. The Respondent admitted that:
    1. from September 2015 to April 2018, he engaged in securities related business that was not carried on for the account and through the facilities of the Member when he recommended and facilitated the sale of at least $1,270,000 worth of promissory notes to 14 clients, contrary to the Member’s policies and procedures and MFDA Rules 1.1.1, 1.2,  2.5.1 and 2.1.1.
    2. in or about December 14, 2017, he misled the Member by making false statements to a branch review officer and not disclosing that he recommended and facilitated the sale of investments outside the Member, contrary to MFDA Rule 2.1.1.

Agreed penalties

  1. Under the terms of the Settlement Agreement, the Respondent:
    1. will pay a fine of $25,000;
    2. will pay costs of $5,000; and
    3. will be prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member for a period of 5 years from the date the Settlement Agreement is accepted.

Considerations

  1. The Hearing Panel determined that it had to be satisfied regarding three considerations before it could accept the Settlement Agreement.
    1. First, the agreed penalty had to be within an acceptable range taking into account similar cases.
    2. Secondly, the agreed penalty had to be fair and reasonable (i.e. proportional to the seriousness of the contravention taking into consideration relevant circumstances) and should appear to be so to members of the public and industry.
    3. Thirdly, the agreed penalty should serve as a deterrent to the Respondent and to industry.
  2. 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.

Misconduct

  1. The Hearing Panel determined that the misconduct admitted to by the Respondent was in contravention of MFDA Rules 1.1, 1.1.2, 2.5.1 and 2.1.1.

Other considerations in determining acceptability of agreed penalties

  1. There was no evidence that the Respondent received any benefit from the misconduct.
  2. There was no evidence of client complaints or client loss.
  3. By entering into the Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducting a full hearing on the allegations.

Costs

  1. The costs award is reasonable.

Conclusion

  1. The agreed penalties are
    1. within the recommendations of the MFDA Sanction Guidelines and the reasonable range of appropriateness with regard to MFDA decisions, submitted to us by Staff, made by MFDA Hearing Panels in similar circumstances;
    2. fair and reasonable; and
    3. will serve as a specific and general deterrent.
  2. Accordingly, we concluded that the Settlement Agreement was in the public interest and, consequently, we accepted it.
  • Paul M. Moore, Q.C.
    Paul M. Moore, Q.C.
    Chair
  • Brigitte J. Geisler
    Brigitte J. Geisler
    Industry Representative

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