Reasons For Decision

Settlement Agreement

1. The Hearing Panel accepted the settlement agreement dated July 8, 2021 (“Settlement Agreement”) between the Staff of the MFDA (“Staff”) and David Juno McMillan (“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 III of the Settlement Agreement.

Contraventions

3. The Respondent admitted that
   1. between August 23, 2017 and November 4, 2019, the Respondent obtained, possessed and used to process transactions, 83 pre-signed account forms in respect of 57 clients, contrary to MFDA Rule 2.1.1;
   2. between October 13, 2017 and June 9, 2019, the Respondent altered and used to process transactions, 11 account forms in respect of 12 clients, by altering information on the account forms without having the client initial the alterations, contrary to MFDA Rule 2.1.1; and
   3. on or about October 1, 2018 and December 19, 2018, the Respondent re-used the signatures of 2 clients on 3 account forms by photographing a signature from a previously signed form to complete a new transaction and submitting the account forms to the Member for processing, contrary to MFDA Rule 2.1.1.

Agreed penalties

4. Under the terms of the Settlement Agreement, the Respondent:
   1. will pay a fine of $30,000;
   2. will pay costs of $2,500; and
   3. will successfully complete the Ethics and Professional Conduct Course offered by the IFSE Institute, or an industry course acceptable to Staff, within 12 months of acceptance of the Settlement Agreement.

Considerations

5. The Hearing Panel determined that it had to be satisfied regarding three considerations before it could accept the Settlement Agreement. First, the agreed penalties had to be within an acceptable range taking into account similar cases. Secondly, the agreed penalties 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. Thirdly, the agreed penalties 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 penalties.

Misconduct

6. The Hearing Panel determined that the alleged misconduct was in contravention of MFDA Rule 2.1.1.

Other considerations in determining acceptability of agreed penalties

7. On October 24, 2019, the Member placed the Respondent on strict supervision for 90 days.
8. On February 12, 2020 the Member ended the period of strict supervision, issued a warning letter to the Respondent, and required the Respondent to pay the Member a $500 fee for the costs associated with strict supervision.
9. In addition the Respondent confirmed to the Member that he had reviewed and would adhere to the Member’s Compliance Policies and Procedures Manual.
10. There was no evidence that the Respondent received any financial benefit from the conduct set out above beyond the commissions or fees he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
11. There was no evidence of client complaints, client loss or lack of client authorization.
12. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
13. 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.
14. The agreed penalties are within the recommendations of the MFDA Sanction 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.

Costs

15. The costs award is reasonable.

Conclusion

16. We concluded that the Settlement Agreement was in the public interest and, consequently, we accepted it.