Ontario District Hearing Committee:
- Paul M. Moore, K.C., Chair
- Cheryl Hamilton, Industry Representative
- Jeff Page, Industry Representative
Michael A. M. Mantle, Enforcement Counsel for the New Self-Regulatory
Organization of Canada (Mutual Fund Division)
Rafal Szymanski, Counsel for Respondent
Albert Marcel Joseph Routhier, Respondent
- Effective January 1, 2023 the Mutual Fund Dealers Association of Canada (“MFDA”) and the Investment Industry Regulatory Organization of Canada consolidated to form the New Self-Regulatory Organization of Canada (“New SRO”).
- On December 19, 2022, the MFDA issued a Notice of Settlement Hearing commencing a disciplinary proceeding in respect of Albert Marcel Joseph Routhier (the “Respondent”).
- Pursuant to Rule 1A of the Mutual Fund Dealer Rules of the New SRO, and s. 14(6) of By-law No. 1 of the New SRO, any enforcement proceeding commenced by the MFDA prior to January 1, 2023, shall proceed in accordance with the by-laws, decisions, directions, policies, regulations, rules, rulings and practices and procedures of the MFDA in effect and applicable to such a proceeding at the time it was commenced, and contraventions of former MFDA regulatory requirements may be enforced by the New SRO.
II. Settlement Agreement
- We accepted the settlement agreement dated December 16, 2022 (“Settlement Agreement”) between the staff of the MFDA (“Staff”) and Albert Marcel Joseph Routhier (“Respondent”) at an electronic settlement hearing held in accordance with New SRO 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 Part IV of the Settlement Agreement. Some capitalized terms used in these reasons are defined in the Settlement Agreement.
- The Respondent admits that
- between November 2015 and February 2021, the Respondent altered and used to process transactions, 42 account forms in respect of 34 clients, by altering information on the account forms without having the client initial the alterations, contrary to MFDA Rule 2.1.1; and
- between April, 2016 and July 2019, the Respondent obtained, possessed and used to process transactions, 3 pre-signed account forms in respect of 3 clients, contrary to MFDA Rule 2.1.1.
- The Settlement Agreement provides that:
- the Respondent shall pay a fine of $25,000; and
- the Respondent shall pay costs of $2,500.
- We determined that we had to be satisfied regarding three considerations before we could accept the Settlement Agreement. First, the sanctions had to be within an acceptable range taking into account similar cases. Secondly, the sanctions 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 sanctions 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 sanctions.
- The Respondent’s conduct was in violation of the standard of conduct required by MFDA Rule 2.1.1. This rule requires that Members and Approved Persons deal fairly, honestly, and in good faith with clients; observe high standards of ethics and conduct in the transaction of business; and refrain from engaging in any business conduct or practice which is unbecoming or detrimental to the public interest. A multitude of MFDA disciplinary cases have found conduct similar to that of the Respondent in our case to be a contravention of MFDA Rule 2.1.1.
VII. Other Considerations
- 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 for the underlying transactions.
- The Member required the Respondent to pay $992 consisting of an administrative charge and the costs of an audit letter mailing to clients.
- The Respondent has not previously been the subject of MFDA disciplinary proceedings.
- By entering into this Settlement Agreement, the Respondent has saved the New SRO the time, resources, and expenses associated with conducting a full hearing on the allegations.
- The sanctions 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.
Paul M. Moore, K.C.Paul M. Moore, K.C.Chair
Cheryl HamiltonCheryl HamiltonIndustry Representative
Jeff PageJeff PageIndustry Representative
On January 1, 2023, the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Mutual Fund Dealers Association of Canada (the “MFDA”) were consolidated into a single self-regulatory organization recognized under applicable securities legislation. The New Self-Regulatory Organization of Canada (referred to herein as the “Corporation”) adopted interim rules that incorporate the pre-amalgamation regulatory requirements contained in the rules and policies of IIROC and the by-law, rules and policies of the MFDA (the “Interim Rules”). The Interim Rules include (i) the Investment Dealer and Partially Consolidated Rules, (ii) the UMIR and (iii) the Mutual Fund Dealer Rules. These rules are largely based on the rules of IIROC and certain by-laws, rules and policies of the MFDA that were in force immediately prior to amalgamation. Where the rules of IIROC and the by-laws, rules and policies of the MFDA that were in force immediately prior to amalgamation have been incorporated into the Interim Rules, Enforcement Staff have referenced the relevant section of the Interim Rules. Pursuant to Mutual Fund Dealer Rule 1A and s.14.6 of By-Law No.1 of the Corporation, contraventions of former MFDA regulatory requirements may be enforced by the Corporation.