Hearing Panel of the Central Regional Council:
- Paul M. Moore, Chair
- Melody Potter, Industry Representative
Audrey Smith, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Pauline Rejeanne Arnold, Respondent
- The Hearing Panel accepted the settlement agreement dated June 28, 2021 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Pauline Rejeanne Arnold (“Respondent”) at an electronic settlement hearing held in accordance with MFDA rules for an electronic hearing.
- 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.
- The Respondent admitted that between June 15, 2015 and September 17, 2018, she, acting as branch manager, reviewed and approved the use of 29 pre-signed and 2 altered account forms, contrary to MFDA Rules 2.5.5 (f) and 2.1.1.
- Under the terms of the Settlement Agreement, the Respondent:
- will pay a fine of $5,000;
- will pay costs of $2,500;
- is prohibited from acting as a branch manager or in a supervisory role with a Member of the MFDA for a period of 6 months; and
- will successfully complete a branch manager’s course before acting again as a branch manager or in a supervisory capacity with an MFDA Member.
- 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.
- The Hearing Panel determined that the alleged misconduct was in contravention of MFDA Rules 2.5.5 (f) and 2.1.1.
Other considerations in determining acceptability of agreed penalties
- On January 15, 2020, the Respondent’s Member terminated the employment of the Respondent with the Member.
- There was no evidence that the Respondent received any financial benefit from the conduct set out above beyond the commissions or fees she would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
- There was no evidence of client complaints, client loss or lack of client authorization.
- The Respondent has not previously been the subject of MFDA disciplinary proceedings.
- 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.
- 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, 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. MoorePaul M. MooreChair
Melody PotterMelody PotterIndustry Representative