Hearing Panel of the Central Regional Council:
- Paul M. Moore, Q.C., Chair
- Cheryl Hamilton, Industry Representative
Audrey Smith, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Rafal Szymanski, Counsel for the Respondent
Jason Daniel Hare, Respondent
I. SETTLEMENT AGREEMENT
- The Hearing Panel accepted the settlement agreement dated August 3, 2021 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Jason Daniel Hare (“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 August 25, 2014 and July 4, 2019, the Respondent obtained, possessed and used to process transactions, 120 pre-signed account forms in respect of 63 clients, contrary to MFDA Rule 2.1.1; and
- between October 23, 2014 and November 20, 2018, the Respondent altered and used to process transactions, 45 account forms in respect of 35 clients, by altering information on the account forms without having the client initial the alterations, contrary to MFDA Rule 2.1.1.
III. AGREED PENALTIES
- Under the terms of the Settlement Agreement, the Respondent:
- will pay a fine of $28,500;
- will pay costs of $2,500; and
- will be suspended from conducting securities related business for 30 days.
- 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 taking into consideration 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 the 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 Rule 2.1.1.
VI. OTHER CONSIDERATIONS IN DETERMINING ACCEPTABILITY OF AGREED PENALTIES
- On November 14, 2019, the Member placed the Respondent on strict supervision for 90 days. The Member had the Respondent confirm that he had reviewed and would adhere to the Member’s Compliance Policies and Procedures Manual.
- During the period of strict supervision, the Member required the Respondent to pay a non-compliance charge for the costs associated with the period of strict supervision, amounting to $2,500. In addition, the Member required the Respondent to pay $1,200 for the costs of mailings to clients while the Member was investigating the misconduct of the Respondent.
- Respondent’s counsel, with the consent of Staff, made the following observation outside of the agreed facts The agreed fine of $28,500, the costs award of $2,500, and the $3,700 paid to the Member do not show the full financial impact on the Respondent flowing from the disciplinary consequences of his misconduct: during the 30 day suspension agreed to as part of the agreed penalties, the Respondent will not receive trailer fees or other remuneration from the Member but the Respondent will continue to have his own staff to pay and other overhead expenses.
- The Respondent agreed with the agreed penalties, including the 30 day suspension as reflected in the Settlement Agreement and did not dispute the agreed penalties. We noted that the Respondent was not claiming financial hardship and that he submitted that we should accept the Settlement Agreement.
- 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.
- 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 and Respondent’s counsel, which were 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, Q.C.Paul M. Moore, Q.C.Chair
Cheryl HamiltonCheryl HamiltonIndustry Representative