Reasons For Decision

I. INTRODUCTION

1. Effective January 1, 2023, the MFDA and the Investment Industry Regulatory Organization of Canada (“IIROC”) were consolidated to form the New Self- Regulatory Organization of Canada (the “Corporation”).^[1]
2. The jurisdiction of these proceedings is confirmed in Mutual Fund Dealer Rule 1A: Transitional Provisions s.1(ii)(iv); 3; and 5(i).
3. On February 1, 2023, the Corporation issued a Notice of Settlement Hearing commencing a disciplinary proceeding against Bernardo Phanthavong (the “Respondent”).
4. On the same day, Staff of the Corporation (“Staff”) and the Respondent entered into a Settlement Agreement (the “Settlement Agreement”) pursuant to which the Respondent agreed to a proposed settlement of matters for which he could be disciplined as an Approved Person of the Corporation, pursuant to Rules 7.4.1.1 and 7.4.4 of the Mutual Fund Dealer Rules.
5. A settlement hearing (the “Hearing”) was held by video conference on March 27, 2023, before a Hearing Panel of the Manitoba District Hearing Committee (the “Panel”). The Respondent attended the Hearing in person as did his legal counsel.
6. At the outset of the Hearing, the Panel granted Staff’s motion to move the proceedings in camera. The Panel then considered the provisions of the Settlement Agreement and the written and oral submissions made by both Staff and counsel for the Respondent.
7. At the conclusion of the Hearing, the Panel accepted the Settlement Agreement and issued an order to that effect. These are the Panel’s reasons for that decision.

II. CONTRAVENTIONS

8. In the Settlement Agreement, the Respondent admitted to having committed the following violations of the Mutual Fund Dealer Rules:

Between February 2018 to June 2018, the Respondent altered client contact information on the Dealer Member’s system without the knowledge or authorization of the client, which had the effect of interfering with the Member’s supervision of the Respondent and impacted its ability to communicate with clients, contrary to Mutual Fund Dealer Rules 2.1.1 and 2.1.4(2). ^[2]

III. TERMS OF SETTLEMENT

9. In the Settlement Agreement, Staff and the Respondent agreed to the following terms of settlement:
   1. the Respondent shall pay a fine in the amount of $7,500 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 7.4.1.l(b) of the Mutual Fund Dealer Rules;
   2. the Respondent shall pay costs in the amount of $5,000 in certified funds upon acceptance of the Settlement Agreement pursuant to s. 7.4.2 of the Mutual Fund Dealer Rules;
   3. the Respondent shall be suspended from acting as a branch manager or in any supervisory capacity for a Dealer Member registered as a mutual fund dealer (formerly Members of the MFDA) for a period of two months commencing upon the date the Settlement Agreement is accepted by the Hearing Panel, pursuant to s. 7.4.1.1(f) of the Mutual Fund Dealer Rules;
   4. the Respondent shall successfully complete an industry course that is acceptable to Staff of the Corporation, within 12 months of the acceptance of the Settlement Agreement, pursuant to s. 7.4.1.l(f) of the Mutual Fund Dealer Rules;
   5. the Respondent shall in the future comply with Mutual Fund Dealer Rules 2.1.1 and 2.1.4(2); and
   6. the Respondent shall attend by videoconference on the date set for the Settlement Hearing.

IV. AGREED FACTS

10. Staff and the Respondent agreed to the terms of settlement on the basis of the facts that were set out in Sections 7 through 31 inclusive, of the Settlement Agreement. Those facts are reproduced below:

Registration History

1. 1. 7. Commencing in December 2011, the Respondent became registered in Manitoba with TD Investment Services Inc. (the “Member”), a Member of the MFDA.
      8. Commencing in December 2014, the Member designated the Respondent as a branch manager.
      9. At all material times, the Respondent was also employed with the Toronto-Dominion Bank (the “Bank”), which is affiliated with the Member.
      10. At all material times, the Respondent conducted business in the Winnipeg, Manitoba area.

Background

The Variable Compensation Program

1. 1. 11. At all material times, a portion of the Respondent’s compensation consisted of variable compensation (the “Variable Compensation Program”). The Respondent’s variable compensation was based on a composite of metrics, one of which was a customer feedback metric (the “Customer Feedback Metric”) derived from satisfaction surveys completed by clients (the “Surveys”).
      12. The Surveys were sent to a random sample of clients by email using the client’s email address stored on the Client Contact Information Systems (described below) used by the Dealer Member.
      13. The Surveys were emailed to clients after, among other things, an Approved Person had processed transactions or account changes on behalf of the client.
      14. The Dealer Member collected client feedback information through the Surveys in order to, among other things, assess in relation to branch staff: Approved Persons: (1) the performance of Approved Persons; (2) variable compensation payable to Approved Persons; (3) eligibility of Approved Persons for rewards and recognition programs of the Dealer Member and the Bank; and (4) any client complaints or concerns with the services provided by Approved Persons to clients.
      15. The Surveys posed questions to clients related to the services offered by branch staff, including Approved Persons, and asked the clients to score their responses. Survey results of a certain value reduced the Customer Feedback Metric for the Respondent’s branch.
      16. The Survey results from all clients who were serviced by Approved Persons who worked at the Respondent’s branch were factored into calculating the Customer Feedback Metric for the Respondent’s branch.
      17. The Respondent was provided with documentation which described how the Customer Feedback Metric was calculated and how it affected his variable compensation.

Misconduct

1. 1. 18. At all material times, Approved Persons were subject to a Code of Conduct and Ethics which prohibited Approved Persons from engaging in unethical business practices.
      19. At all material times, Approved Persons registered with the Dealer Member had access to systems used by the Dealer Member to collect client information (the “Client Contact Information Systems”).
      20. The Client Contact Information Systems contained a feature which allowed Approved Persons to select whether the client wished to be contacted by the Dealer Member for certain purposes. If the Approved Person selected “No” on behalf of the client, a client would not receive Surveys or promotional communications from the Dealer Member.
      21. Between February 2018 to June 2018, the Respondent set the contact preferences to “No” for five clients who held investment accounts at the Dealer Member and 8 other individuals who held accounts at the Bank, without their consent. As a result, these clients and other individuals did not receive the Surveys.
      22. The Dealer Member prohibited Approved Persons from changing client contact preferences contained in the Client Contact Information Systems without the consent of the client.
      23. Changing client contact preferences did not restrict the client’s ability to access their investment accounts or Bank accounts online.
      24. The Respondent engaged in the misconduct set out above in order to prevent the clients from receiving a Survey which could have potentially negatively affected the Customer Feedback Metric for the Respondent’s branch as well as his eligibility for rewards and recognition programs. The impact on the Respondent’s compensation is not known.
      25. As a consequence of the Respondent’s misconduct, he:
          1. prevented clients from receiving the Survey which may have affected the Customer Feedback Metric and consequently the variable compensation the Respondent and Approved Persons in his branch would receive as well as his eligibility for rewards and recognition programs maintained by the Dealer Member; and
          2. prevented clients from receiving promotional communications about products and services offered by the Dealer Member.

Additional Factors

1. 1. 26. On September 14, 2018, the Dealer Member issued the Respondent a letter of reprimand in respect of the misconduct described in this Settlement Agreement.
      27. As a result of the misconduct described above, the Dealer Member imposed a three day unpaid suspension on the Respondent, prohibited the Respondent from participating in the Dealer Member’s rewards and recognition programs in 2018, and negatively impacted the Respondent’s managerial assessment rating for the remaining calendar year, which negatively affected the Respondent’s base salary for the following year.
      28. The Dealer Member has contacted affected clients in order to confirm the client’s contact preferences contained in the Client Contact Information Systems.
      29. There is no evidence of financial losses to clients arising from the misconduct described in this Settlement Agreement.
      30. The Respondent has not previously been the subject of MFDA or Corporation disciplinary proceedings.
      31. By entering into this Settlement Agreement, the Respondent has saved the Corporation the time, resources and expenses associated with conducting a full hearing of the allegations.

V. ANALYSIS

The Law

11. As set out in the Notice of Settlement Hearing, the misconduct which is the subject of these proceedings involved a breach of MFDA Rule 2.1.1 (now Mutual Fund Dealer Rule 2.1.1) and MFDA Rule 2.1.4 (now Mutual Fund Dealer Rule 2 .1.4 (2)).

Standard of Conduct

12. MFDA Rule 2.1.1 establishes minimum standards of honesty and ethics that Approved Persons are required to uphold.  The rule requires among other things, that:

Each Member and Approved Person of a Member shall: deal fairly, honestly and in good faith with its clients; observe high standards of ethics and conduct in the transaction of business; and not engage in any business conduct or practice which is unbecoming or detrimental to the public interest.

13. The rule has been interpreted and applied in a purposeful manner in a wide range of circumstances and as the Hearing Panel in Breckenridge Re stated, it:

… articulates the most fundamental obligations of all registrants in the securities industry.

Breckenridge (Re), MFDA file NO. 200718, Hearing Panel of the Central Regional Council, 2007 LNC MFDA 38 at para. 71

14. The Respondent has admitted that without the clients’ knowledge or authorization, he altered the client contact preferences of five of the Member’s clients and eight clients of the Bank which is affiliated with the Member (the “Bank”) on a back office system that was used by the Member and the Bank to collect client contact information (the “Client Contact Information System”).
15. The Member and the Bank used information recorded on the Client Contact Information System to communicate with clients for various purposes including to obtain feedback from them in client satisfaction surveys and to promote other products and services to them.
16. The client satisfaction surveys were sent to a random sample of clients by email using the clients’ email addresses stored on the Client Contact Information Systems.
17. The Client Contact Information System contained a feature which allowed Approved Persons like the Respondent to select whether the client wished to be contacted by the Dealer Member.
18. If the Approved Person selected “No” on behalf of the client, the client would not receive either surveys or promotional communications from the Dealer Member.
19. The Respondent’s compensation consisted of variable compensation that was based on a composite of metrics including something called the Customer Feedback Metric which was derived from customer responses to the client satisfaction surveys. Survey results of a certain value could reduce the Customer Feedback Metric for the Respondent’s branch.
20. The Respondent has admitted that the reason he engaged in the misconduct was to prevent clients from receiving a survey which could have potentially negatively affected the Customer Feedback Metric for his branch and his eligibility for rewards and recognition programs.

Settlement Agreement, para 24

21. MFDA Hearing Panels have previously held that where an Approved Person makes changes to client information without the knowledge or authorization of the client, their conduct contravenes Rule 2.1.1. See, for example, the following:
    1. changing a client’s residential address on a Member’s back office system to prevent a client from learning about the performance of their investments;
       Patel (Re), [2019] Hearing Panel of the Central Regional Council, MFDA File No. 201921, Reasons for Decision dated December 4, 2019
    2. changing a client’s address on a Member’s back office system to falsely indicate that the client was a resident of a jurisdiction where the Approved Person was registered;
       An (Re), [2017] Hearing Panel of the Central Regional Council, MFDA File No. 2016109, Reasons for Decision dated March 29, 2017
    3. failing to accurately record client information which concealed from the Member that a client was no longer resident of a jurisdiction where the Approved Person was registered; and
       Collymore (Re), [2022] Hearing Panel of the Central Regional Council, MFDA File No. 202214, Reasons for Decision dated December 14, 2022
    4. changing a client’s banking information based upon email instructions received from a third party who, without the Respondent’s knowledge, had gained unlawful access to the client’s email.
       Chiu (Re), [2017] Hearing Panel of the Central Regional Council, MFDA File No. 201757, Reasons for Decision dated October 20, 2017
22. The Panel finds that the Respondent’s conduct demonstrates a disturbing lack of integrity and clearly amounts to a failure to: 1) deal fairly, honestly and in good faith with clients; 2) observe high standards of ethics and conduct in the transaction of business; and 3) refrain from engaging in any business conduct or practice which is unbecoming or detrimental to the public interest, in contravention of MFDA Rule 2.1.1.

Conflict of interest

23. The version of MFDA Rule 2.1.4 that was in effect at the relevant time required that:
    1. Each Member and Approved Person shall be aware of the possibility of conflicts of interest arising between the interests of the Member or Approved Person and the interests of the client. Where an Approved Person becomes aware of any conflict or potential conflict of interest, the Approved Person shall immediately disclose such conflict or potential conflict of interest to the Member;
    2. In the event that such a conflict or potential conflict of interest arises, the Member and the Approved Person shall ensure that it is addressed by the exercise of responsible business judgment influenced only by the best interests of the client and in compliance with Rules 2.1.4(c) and (d);
    3. Any conflict or potential conflict of interest that arises as referred to in Rule 2.1.4(a) shall be immediately disclosed in writing to the client by the Member, or by the Approved Person as the Member directs, prior to the Member or Approved Person proceeding with the proposed transaction giving rise to the conflict or potential conflict of interest; and
    4. Each Member shall develop and maintain written policies and procedures to ensure compliance with Rules 2.1.4(a), (b) and (c).

MFDA Rule 2.1.4 as at July 15, 2016

24. As the Hearing Panel in Gaunt (Re) stated:

A conflict of interest occurs when one party to a matter advances, uses or pursues his own interests in dealing with another person, to whom he has an obligation of dealing fairly, to the detriment of that other person or to his own advantage rather than the person to whom he owes the duty of fairness.

Gaunt (Re), [2013] Hearing Panel of the Atlantic Regional Council, MFDA File No. 201232, Reasons for Decision dated September 20, 2013, at para. 47

25. A failure to address a conflict of interest through the exercise of responsible business judgment influenced only by the best interests of the client can result in client harm, give rise to civil liability and undermine public trust in the investment industry.
26. MFDA Hearing Panels have held that where an Approved Person advances their own interests by processing trades or changes to client accounts without the client’s knowledge or authorization, their conduct gives rise to a conflict of interest with the client which must be addressed in compliance with the requirements of MFDA Rule 2.1.4.

Rana (Re), [2019] Hearing Panel of the Central Regional Council, MFDA File No. 201871, Reasons for Decision dated March 19, 2019

Hale (Re), [2021] Hearing Panel of the Prairie Regional Council, MFDA File No. 202046, Reasons for Decision dated March 9, 2021

Leonard (Re), [2020] Hearing Panel of the Central Regional Council, MFDA File No. 201919, Reasons for Decision dated October 2, 2020

27. As described above, the Respondent has admitted that he made unauthorized changes to client contract preferences in order to prevent customers of the Bank and clients of the Member from receiving surveys soliciting feedback which could have negatively affected the variable compensation that he and Approved Persons who worked at his branch would be eligible to receive and detrimentally affected his eligibility for rewards and recognition programs.
28. This conduct had the potential to disadvantage clients by preventing them from communicating feedback about the financial services they received from Approved Persons and preventing them from receiving promotional materials from the Member and the Bank.
29. By virtue of his admitted conduct the Respondent advanced his own interests ahead of the interests of his clients thereby creating a conflict of interest. He did not disclose the conflict to the Member or the clients in writing; nor did he ensure that the conflict was addressed by the exercise of responsible judgment influenced only by the best interests of the clients.
30. The Panel agrees, therefore, that the Respondent clearly contravened MFDA Rule 2.1.4.

General Principles Regarding the Acceptance of Settlement Agreements

31. The role a Hearing Panel performs at a settlement hearing is fundamentally different from the role it performs at a contested hearing.
32. When considering a settlement agreement, a Hearing Panel has only two options: either to accept or reject the settlement agreement.
    1. Mutual Fund Dealer Rule 7.4.4.3
33. As stated by the Hearing Panel in Sterling Mutuals Inc. (Re) citing the I.D.A. Ontario District Council in Milewski (Re):
    1. …while in a contested hearing the Panel attempts to determine the correct penalty, in a settlement hearing the Panel “will tend not to alter a penalty that it considers to be within a reasonable range, taking into account the settlement process and the fact that the parties have agreed. It will not reject a settlement unless it views the penalty as clearly falling outside a reasonable range of appropriateness.” (In re Milewski, [1999] I.D.A.C.D. No. 17)
    2. Sterling Mutuals Inc. (Re), MFDA File No. 200820, Hearing Panel of the Central Regional Council, Decision and Reasons dated September 3, 2008, at para. 37
34. Hearing Panels have acknowledged that one of the reasons that settlement agreements which have been worked out by the parties should be respected is because Panels do not know what led to the settlement, or what was given up by the parties during the course of their negotiations. The presence of experienced legal counsel during the negotiation of a settlement agreement, as was the case in this matter, is also a factor to consider.
    1. Fike (Re), MFDA File No. 2017102, Hearing Panel of the Central Regional Council, Decision and Reasons dated December 7, 2017, at paras. 22 and 23
    2. Ho (Re), [2018] Hearing Panel of the Central Regional Council, MFDA File No. 2017120, Reasons for Decision dated March 5, 2018, at para. 25
35. The rationale for respecting settlements of the nature found in the Settlement Agreement in this case, was further articulated by the British Columbia Court of Appeal:
    1. Settlements assist the Commission to ensure that its overriding objective, the protection of the public, is met. Settlements proscribe activities that are harmful to the public.  In so doing, they are effective in accomplishing the purposes of the statute.  They provide means of reaching a flexible remedy that is tailored to address the interests of both the Commission and the person under investigation.  Enforcement is rarely a concern because the settlement is voluntary.  A person who is the subject of an investigation retains the option of refusing to settle and proceeding to a hearing.  Settlements are also efficient.  Both parties can forego the time and expense of a hearing.  Or, they can settle some matters, and direct their resources to the matters that are in dispute, and therefore to be resolved by way of a hearing.
    2. British Columbia (Securities Commission) v Seifert, 2007 BCCA 484, at para. 31
36. Although the Seifert decision dealt with an agreement that was before the British Columbia Securities Commission, the case has been frequently cited by Hearing Panels in MFDA Settlement Hearings.

Factors Concerning Acceptance of a Settlement Agreement

37. MFDA Hearing Panels have previously taken into account the following considerations when determining whether a proposed settlement should be accepted:
    1. whether acceptance of the settlement agreement would be in the public interest and whether the penalty imposed will protect investors;
    2. whether the settlement agreement is reasonable and proportionate, having regard to the conduct of the Respondent as set out in the settlement agreement;
    3. whether the settlement agreement addresses the issues of both specific and general deterrence;
    4. whether the proposed settlement will prevent the type of conduct described in the settlement agreement from occurring again in the future;
    5. whether the settlement agreement will foster confidence in the integrity of the Canadian capital markets;
    6. whether the settlement agreement will foster confidence in the integrity of the MFDA; and
    7. whether the settlement agreement will foster confidence in the regulatory process itself.
       1. Jacobson (Re), [2007] Hearing Panel of the Prairie Regional Council, MFDA File No. 200712, Reasons for Decision dated July 13, 2007 at para. 68
38. A Hearing Panel should not interfere lightly in a negotiated settlement as long as the penalties agreed upon are within a reasonable range of appropriateness having regard to the conduct of the Respondent.
    1. Ibid at para. 70

Factors Concerning the Appropriateness of the Proposed Penalty

39. The primary goal of all securities regulation is investor protection.
    1. Pezim v British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557, at para. 68
40. In addition to investor protection, the goals of securities regulation include fostering public confidence in the capital markets and in the securities industry as a whole.
    1. Pezim, supra, at paras. 59 & 68
41. With these principles in mind, the factors that MFDA Hearing Panels have considered when determining whether a penalty is appropriate, include the following:
    1. the seriousness of the allegations proved against the Respondent;
    2. the Respondent’s past conduct, including prior sanctions;
    3. the Respondent’s experience and level of activity in the capital markets;
    4. whether the Respondent recognizes the seriousness of the improper activity;
    5. the harm suffered by investors as a result of the Respondent’s activities;
    6. the benefits received by the Respondent as a result of the improper activity;
    7. the risk to investors and the capital markets in the jurisdiction, were the Respondent to continue to operate in capital markets in the jurisdiction;
    8. the damage caused to the integrity of the capital markets in the jurisdiction by the Respondent’s improper activities;
    9. the need to deter not only those involved in the case being considered, but also any others who participate in the capital markets, from engaging in similar improper activity;
    10. the need to alert others to the consequences of inappropriate activities to those who are permitted to participate in the capital markets; and
    11. previous decisions made in similar circumstances.
        1. Headley (Re), [2006] Hearing Panel of the Pacific Regional Council, MFDA File No. 200509, Reasons for Decision dated February 21, 2006 at para. 85
42. A Hearing Panel may also refer to the MFDA’s Sanction Guidelines when deciding whether a penalty is appropriate. While those guidelines are not mandatory or binding on a Panel, they provide a summary of the key factors upon which a Panel can exercise its discretion in a consistent and fair manner. Many of the same factors that have been considered in MFDA Hearing Panels decisions are reflected and described in these guidelines.

Application of the Factors Listed Above in the Present Case

43. Staff submitted that this matter is novel having regard to its underlying facts. They noted, however, that this case is one of several recent cases which deal with similar types of misconduct.
44. The novelty of the matter notwithstanding, Staff submitted that the proposed penalty falls within a reasonable range of appropriateness having regard to the regulatory objectives discussed below.

Seriousness of the misconduct

45. The Respondent engaged in conduct that gave rise to conflicts or potential conflicts of interest which he failed to address in compliance with regulatory requirements and in doing so contravened the standard of conduct expected of an Approved Person.
46. This type of misconduct was addressed in Salina (Re), where the Hearing Panel stated:
    1. The failure to disclose and properly address conflicts or potential conflicts is serious misconduct. Such conflicts can result in harm to the client, expose the member to liability, and undermine trust in the mutual fund industry. As stated by the hearing Panel in Haylock (Re) “it is always a serious matter when there is a conflict of interest between an Approved Person and her client”.
    2. Salina (Re), [2022] Hearing Panel of the Pacific Regional Council, MFDA File No. 202081, Reasons for Decision dated August 30 2022 at para. 32
    3. Haylock (Re), [2013] Hearing Panel of the Central Regional Council, MFDA File No. 201243, Reasons for Decision dated July 5, 2013 at para. 7
47. The Respondent’s misconduct was intentional and deceitful. It was not based upon a lack of knowledge or training in the investment industry.  The seriousness of his conduct was aggravated by the fact that he was a branch manager who was entrusted with responsibility for ensuring that other Approved Persons complied with their regulatory objections.
48. The Panel finds that the Respondent’s misconduct was serious and risks undermining the Corporation’s fundamental objectives to protect the investing public, foster confidence in the integrity of the Canadian capital markets and the integrity of the Corporation and the regulatory process itself.

The Respondent’s recognition of the seriousness of the misconduct

49. By entering into the Settlement Agreement, the Respondent has demonstrated that he recognizes the seriousness of his misconduct. He has accepted responsibility for his actions and has saved the Corporation the time, resources and expenses that would have been necessary had this matter proceeded by way of a contested disciplinary hearing.

The Respondent’s Past Conduct

50. The Respondent has not previously been the subject of disciplinary proceedings commenced by either the MFDA or the Corporation.

Client Harm

51. There is no evidence of financial loss to clients arising from the Respondent’s misconduct and the Member has contacted the affected clients in order to confirm that their contact preferences recorded on the Client Contact Information Systems are now accurate.

Benefits to the Respondent

52. The precise impact of the Respondent’s misconduct on his compensation is not known. He has acknowledged, however, that he engaged in the misconduct in order to prevent clients from conveying feedback which could have negatively affected his variable compensation as well as his eligibility for rewards and recognition programs.

Deterrence

53. Both the Supreme Court of Canada and MFDA Hearing Panels have held that deterrence is an important factor to be taken into account when determining the appropriateness of a penalty. See, for example:  Cartaway Resources Corp (Re), [2004] 1 SCR 672 at paras. 52-62.
54. Deterrence is intended to capture both specific deterrence of the wrongdoer as well as general deterrence of other participants in the capital markets:
    1. The Oxford English Dictionary (2nd ed. 1989), vol. XII, defines “preventive” as “[t]hat anticipates in order to ward against; precautionary; that keeps from coming or taking place; that acts as a hindrance or obstacle”. A penalty that is meant to deter generally is a penalty that is designed to keep an occurrence from happening; it discourages similar wrongdoing in others. In a word, a general deterrent is preventative. It is therefore reasonable to consider general deterrence as a factor, albeit not the only one, in imposing a sanction under s. 162. The respective importance of general deterrence as a factor will vary according to the breach of the Act and the circumstances of the person charged with breaching the Act.
    2. Cartaway Resources Corp. (Re), supra, at para. 61
55. Staff submitted that the proposed penalty comprises meaningful sanctions including financial penalties and a two-month suspension on the Respondent’s authority to work in a supervisory role that will operate as a specific deterrent to the Respondent and more broadly will deter other Approved Persons from engaging in similar misconduct in the future.
56. In his submission to the Panel, the Respondent‘s counsel highlighted the ways in which the proposed penalty will affect the Respondent’s career, noting that it will not only have an impact on his compensation but more importantly will have a lasting impact on his reputation and future career advancement.
57. He also noted that the professional conduct course which the Respondent must complete should reassure the Panel that the public’s interest will be protected going forward.

Sanctions Imposed by the Member

58. The Member imposed disciplinary consequences on the Respondent once his misconduct came to light.
    1. Settlement Agreement, paras. 26 -27
59. As the Sanction Guidelines indicate, sanctions imposed by a Member are an appropriate factor for a Panel to consider when determining whether to accept a Settlement Agreement. We agree with Staff’s submission that the sanctions which the Member imposed in this case will promote specific deterrence for the Respondent.

Previous Decisions in Similar Circumstances

60. Staff submitted that the proposed penalty falls within a reasonable range of appropriateness having regard to decisions made by MFDA Hearing Panels and Hearing District Panels which involved similar circumstances, as reflected in the chart below:

61. Staff took the time at the Hearing to review these decisions for the Panel’s benefit.
62. Based on those submissions the Panel agrees that notwithstanding the novelty of the factual circumstances of this matter the proposed penalty falls within a reasonable range of appropriateness.

VI. CONCLUSION

63. For all of the above reasons, having reviewed the Settlement Agreement and having considered Staff’s submissions both written and oral and the submissions made by counsel for the Respondent, the Panel is satisfied that the penalty which is proposed in the Settlement Agreement falls within a reasonable range of appropriateness having regard to the nature and extent of the Respondent’s misconduct in all of the circumstances.
64. The Panel, therefore, accepts the Settlement Agreement.