Hearing Panel of the Central Regional Council:
- Paul M. Moore, Chair
- Melody Potter, Industry Representative
Julie Grajales, Enforcement Counsel for the Mutual Fund Dealers Association of Canada
Zach Pringle, Counsel for Respondent
Nelson Osedele, Respondent
I. SETTLEMENT AGREEMENT
- We accepted the settlement agreement dated February 8, 2022 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Nelson Osedele (“Respondent”) at a settlement hearing held electronically by videoconference held in accordance with MFDA rules for electronic hearings.
- A copy of the Settlement Agreement is attached to these Reasons as Schedule “1”. The agreed facts are set out in Part IV of the Settlement Agreement.
- The Respondent admitted in the Settlement Agreement that on or about February 28, 2020, the Respondent:
- opened an account without communicating with the account holder;
- submitted an account application form that he knew was not signed by the account holder and which did not contain the account holder’s Know Your Client information; and
- processed a trade without the account holder’s authorization, contrary to MFDA Rules 2.1.1, 2.2.1, and 2.2.2.
III. AGREED PENALTY
- Staff and the Respondent agree and consent to the following terms of settlement:
- the Respondent shall pay a fine in the amount of $10,000, pursuant to s. 24.1.1(b) of MFDA By-law No.1;
- the Respondent shall pay costs in the amount of $2,500, pursuant to s. 24.2 of MFDA By-law No.1;
- the payment by the Respondent of the fine and costs shall be made to and received by the MFDA in certified funds as follows:
- $2,500 upon acceptance of the Settlement Agreement by the Hearing Panel;
- $3,300 on or before the last business day of the first month following the date of the Settlement Agreement;
- $3,300 on or before the last business day of the second month following the date of the Settlement Agreement; and
- $3,400 on or before the last business day of the third month following the date of the Settlement Agreement;
- the Respondent shall in the future comply with MFDA Rules 2.1.1, 2.2.1, and 2.2.2.
- We determined that we had to be satisfied regarding three considerations before we 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 contraventions 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 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.
- The Respondent’s conduct was in violation of the MFDA Rules cited under “Contraventions” above.
VI. OTHER CONSIDERATIONS
- There was no evidence that the Respondent received any 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 loss attributable to the misconduct.
- 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, 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