Settlement Agreement

Settlement Agreement
File No. 200916

IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Cory Edwin Griffiths



SETTLEMENT AGREEMENT

I.
INTRODUCTION

1.
By Notice of Settlement Hearing dated October 8, 2009, the Mutual Fund Dealers
Association of Canada (the “MFDA”) announced that it proposed to hold a hearing to
consider whether, pursuant to section 24.4 of By-law No. 1, a hearing panel of the Prairie
Regional Council (the “Hearing Panel”) of the MFDA should accept the settlement
agreement (the “Settlement Agreement”) entered into between Staff of the MFDA
(“Staff”) and Cory Edwin Griffiths (the “Respondent”).

II.
JOINT SETTLEMENT RECOMMENDATION

2.
Staff conducted an investigation of the Respondent’s activities. The investigation
disclosed that the Respondent had engaged in activity for which the Respondent could be
penalized on the exercise of the discretion of the Hearing Panel pursuant to s. 24.1 of By-
law No.1.

Page 1 of 13

3.
Staff and the Respondent recommend settlement of the matters disclosed by the
investigation in accordance with the terms and conditions set out below. The Respondent
agrees to the settlement on the basis of the facts set out in Part IV herein and consents to
the making of an Order in the form attached as Schedule “A”.

4.
Staff and the Respondent agree that the terms of this Settlement Agreement,
including the attached Schedule “A”, will be released to the public only if and when the
Settlement Agreement is accepted by the Hearing Panel.

III.
ACKNOWLEDGEMENT

5.
Staff and the Respondent agree with the facts set out in Part IV herein for the
purposes of this Settlement Agreement only, and further agree that this agreement of facts
is without prejudice to the Respondent or Staff in any other proceeding of any kind
including, but without limiting the generality of the foregoing, any proceedings brought
by the MFDA (subject to paragraph 42 below) or any civil or other proceedings which
may be brought by any other person or agency, whether or not this Settlement Agreement
is approved by the MFDA.

IV.
AGREED FACTS

Registration History
6.
From May 8, 2008 to November 7, 2008, the Respondent was registered in
Alberta as a mutual fund salesperson with ATB Investment Services Inc. (“ATB”). Prior
to his registration with ATB, the Respondent was registered in Alberta as a mutual fund
salesperson as follows:
(a)
February 2007 to February 2008 – Scotia Securities Inc.;
(b)
May 2006 to October 2006 – Credential Asset Management Inc.; and
(c)
August 2004 to December 2004 – CIBC Securities Inc.
Page 2 of 13

7.
The Respondent has not previously been the subject of an MFDA disciplinary
proceeding. The MFDA did not receive any client complaints regarding the Respondent
in respect of this matter.
8.
The Respondent is not currently registered in the securities industry in any
capacity. He is in his early 40s, and states that he is registered to return to full-time post-
secondary studies in an unrelated field.
Falsification of Account Documents
Clients MB and TB
9.
On or about June 9, 2008, clients MB and TB met with the Respondent to open a
joint, non-registered account. At this time, MB and TB completed and signed a New
Client Application Form (“NCAF”) that included queries about MB’s and TB’s
combined annual income, investment objectives and risk tolerance.
10.
The relevant portions of MB and TB’s NCAF read as follows:
•
Annual income: “$25,000 – $50,000”;
•
Investment Objectives: “safety”; and
•
Risk Tolerance: “low”.

11.
On or about May 29, 2008, in advance of his meeting with MB and TB on June 9,
2008, the Respondent had prepared an Asset Allocation Report for MB and TB’s joint
account, the relevant portions of which read as follows:
•
Annual income: “$50,001 – $75,000”;
•
Investment Objectives: “conservative”; and
•
Risk Tolerance: “medium”.

12.
The Asset Allocation Report incorrectly identified the account type as
“registered”. MB and TB signed the Asset Allocation Report, dated May 29, 2008.
13.
Following the June 9, 2008 meeting, the Respondent submitted MB and TB’s
account opening documents to head office.
Page 3 of 13

14.
ATB’s New Accounts Administrator advised the Respondent that deficiencies had
been identified on MB and TB’s documents and that trading would not be permitted in
their account until the deficiencies had been rectified.
15.
On or about October 3, 2008, the Respondent prepared a revised version of the
Asset Allocation Report for MB and TB’s joint account, the relevant portions of which
read as follows:
•
Annual income: “$25,001 – $50,000”;
•
Investment Objectives: “safety”; and
•
Risk Tolerance: “low”.

16.
The revised version of the Asset Allocation Report also correctly identified the
account type as “non-registered”.
17.
The Respondent falsified the signatures of MB and TB on the revised version of
the Asset Allocation Report so that it would appear that MB and TB had authorized the
changes to it and submitted the document to ATB head office.
18.
MB and TB were not aware of and did not authorize the changes to their annual
income, investment objectives, risk tolerance and account type as stated on the revised
version of the Asset Allocation Report.
Client MB
19.
On or about June 18, 2008, client MB met with the Respondent to open a new
account. At this time, MB completed and signed an NCAF, which designated the account
as a registered retirement savings plan (“RRSP”).
20.
Following his meeting with MB, the Respondent submitted the account opening
documentation to ATB head office.
21.
On or about June 19, 2008, ATB’s New Accounts Administrator advised the
Respondent that deficiencies had been identified on MB’s NCAF and that trading would
not be permitted in MB’s account until the deficiencies had been rectified. The noted
deficiencies pertained to various pieces of missing or incomplete information, including
Page 4 of 13

MB’s initials on the portion of the NCAF authorizing ATB to apply for registration of the
new account as an RRSP.
22.
At some point between June 19, 2008 and June 30, 2008, the Respondent falsified
MB’s initials on MB’s NCAF so that it appeared that MB had authorized ATB to apply
for registration of the new account as an RRSP. The Respondent resubmitted the NCAF
to ATB head office.
23.
MB had intended that the account be opened as an RRSP but was not aware that
the Respondent had changed the NCAF to authorize ATB to do so by falsifying MB’s
initials on it.
Client CB
24.
On or about September 29, 2008, client CB met with the Respondent to open a
new account. At this time, CB completed and signed an NCAF that included queries
about CB’s annual income, net worth, investment knowledge and risk tolerance. In the
portion concerning CB’s risk tolerance, the box labeled “low” was checked off.
25.
At the same meeting, an Asset Allocation Report was also prepared for CB,
wherein her risk tolerance was indicated to be “medium”.
26.
Following the meeting, at some point between September 29, 2008 and October 8,
2008, the Respondent changed CB’s risk tolerance from “low” to “medium” on the
NCAF by checking off the “medium” box and falsifying CB’s initials next to the
“medium” box so that it would appear that CB had authorized the change in her risk
tolerance.
27.
CB was not aware of and did not initial the change to her risk tolerance on the
NCAF.
28.
The falsifications that the Respondent made to client documents did not alter the
clients’ stated investing intentions. The Respondent states that he made the changes to
‘match’ documents that had been incorrectly completed by him. No trades were ever
executed in the above-noted clients’ accounts.
Page 5 of 13

29.
There is no evidence of any client complaint or harm with respect to this matter.
30.
The Respondent received no monetary or other benefit with respect to the
falsifications he made on the client documents.
Providing False and Misleading Responses to the Member
31.
Upon reviewing CB’s account opening documentation, ATB compliance
personnel noticed that CB’s initials purportedly authorizing the change in her risk
tolerance on her NCAF appeared to be inconsistent with CB’s handwriting elsewhere on
the account opening documentation.
32.
Accordingly, on October 21, 2008, ATB compliance personnel questioned the
Respondent about the change in CB’s risk tolerance on the NCAF.
33.
The Respondent initially stated that he had left CB’s NCAF at branch reception
for CB to sign and that CB had come in to initial the change when reception staff was
present but the Respondent was not present.
34.
ATB compliance personnel then asked the Respondent how CB had known to
initial the change to the risk tolerance portion of the NCAF since it had not been
indicated to CB that there was a deficiency. The Respondent stated that he had told CB to
do so after noticing the discrepancy in CB’s risk tolerance between the NCAF and the
Asset Allocation Report.
35.
The Respondent denied knowing who CB might have met with at reception and
stated that he had not instructed that copies of the NCAF be retained.
36.
Further investigation by ATB compliance personnel determined that CB could
only have attended at reception to initial the change to the NCAF after the NCAF had
already been altered and submitted, which was, therefore, impossible.
37.
Given the inconsistencies in the Respondent’s explanations, the Branch Manager
met with the Respondent on October 27, 2008. During this meeting, the Respondent
initially maintained that he was unable to explain how the initials and the change in risk
Page 6 of 13

tolerance had been made to CB’s NCAF, and in so asserting, abandoned his earlier
explanation that CB had initialed the changes at reception.
38.
After the Branch Manager informed the Respondent that the authenticity of CB’s
initials on the NCAF was going to be verified by a handwriting expert, the Respondent
admitted that he had falsified CB’s initials.
39.
Based on further admissions and statements made by the Respondent to the
Branch Manager, ATB compliance personnel subsequently determined that the
Respondent had also falsified the account documents of MB and TB, in the manner
described above. ATB terminated the Respondent’s employment on November 7, 2008.
V.
CONTRAVENTIONS

40.
The Respondent admits that:
(a)
between June 2008 and October 2008, he falsified client initials, client
signatures and other information on the account opening documents of
clients MB, TB and CB, contrary to MFDA Rule 2.1.1; and
(b)
in October 2008, he interfered with the ability of the Member to conduct a
reasonable supervisory investigation of his conduct by providing false and
misleading responses to the Member in the course of its investigation,
before admitting to the falsifications, contrary to MFDA Rules 1.1.2 and
2.5.1 and MFDA Rule 2.1.1.
VI.
TERMS OF SETTLEMENT

41.
The Respondent agrees to the following terms of settlement:
(a)
the Respondent shall pay a fine in the amount of $1,000.00, pursuant to
section 24.1.1(b) of By-law No. 1;
Page 7 of 13

(b)
the Respondent shall be suspended from acting as a mutual fund
salesperson for a period of 2 years, effective from the date of this Order
and pursuant to MFDA By-Law No. 1, section 24.1.1(c); and
(c)
the Respondent shall not pay any costs of the MFDA’s investigation or of
this proceeding.

VII.
STAFF COMMITMENT

42.
If this Settlement Agreement is accepted by the Hearing Panel, Staff will not
initiate any proceeding under the By-laws of the MFDA against the Respondent in
respect of any conduct or alleged conduct of the Respondent in relation to the facts set
out in Part IV of this Settlement Agreement, subject to the provisions of paragraph 42
below.

VIII. PROCEDURE FOR APPROVAL OF SETTLEMENT

43.
Acceptance of this Settlement Agreement shall be sought at a hearing of the
Prairie Regional Council of the MFDA on October 26, 2009, as previously agreed to by
counsel for Staff and the Respondent.

44.
Staff and the Respondent may refer to any part, or all, of the Settlement
Agreement at the settlement hearing. Staff and the Respondent also agree that if this
Settlement Agreement is accepted by the Hearing Panel, it will constitute the entirety of
the evidence to be submitted respecting the Respondent in this matter, and the
Respondent agrees to waive his rights to a full hearing, a review hearing before the Board
of Directors of the MFDA or any securities commission with jurisdiction in the matter
under its enabling legislation, or a judicial review or appeal of the matter before any court
of competent jurisdiction.

45.
Staff and the Respondent agree that if this Settlement Agreement is accepted by
the Hearing Panel, then the Respondent shall be deemed to have been penalized by the
Page 8 of 13

Hearing Panel pursuant to s. 24.1.1 of By-law No. 1 for the purpose of giving notice to
the public thereof in accordance with s. 24.5 of By-law No. 1.

46.
Staff and the Respondent agree that if this Settlement Agreement is accepted by
the Hearing Panel, neither Staff nor the Respondent will make any public statement
inconsistent with this Settlement Agreement. Nothing in this section is intended to
restrict the Respondent from making full answer and defence to any civil or other
proceedings against him.

47.
If this Settlement Agreement is accepted by the Hearing Panel and, at any
subsequent time, the Respondent fails to honour any of the Terms of Settlement set out
herein, Staff reserves the right to bring proceedings under the By-laws of the MFDA
against the Respondent based on, but not limited to, the facts set out in Part IV of the
Settlement Agreement, as well as the breach of the Settlement Agreement.

48.
If, for any reason whatsoever, this Settlement Agreement is not accepted by the
Hearing Panel or an Order in the form attached as Schedule “A” is not made by the
Hearing Panel, each of Staff and the Respondent will be entitled to any available
proceedings, remedies and challenges, including proceeding to a disciplinary hearing
pursuant to sections 20 and 24 of By-law No. 1, unaffected by this Settlement Agreement
or the settlement negotiations.

49.
Whether or not this Settlement Agreement is accepted by the Hearing Panel, the
Respondent agrees that he will not, in any proceeding, refer to or rely upon this
Settlement Agreement or the negotiation or process of approval of this Settlement
Agreement as the basis for any allegation against the MFDA of lack of jurisdiction, bias,
appearance of bias, unfairness, or any other remedy or challenge that may otherwise be
available.
Page 9 of 13

IX.
DISCLOSURE OF AGREEMENT

50.
The terms of this Settlement Agreement will be treated as confidential by the
parties hereto until accepted by the Hearing Panel, and forever if, for any reason
whatsoever, this Settlement Agreement is not accepted by the Hearing Panel, except with
the written consent of both the Respondent and Staff or as may be required by law.

51.
Any obligations of confidentiality shall terminate upon acceptance of this
Settlement Agreement by the Hearing Panel.

X.
EXECUTION OF SETTLEMENT AGREEMENT

52.
This Settlement Agreement may be signed in one or more counterparts which
together shall constitute a binding agreement.

53.
A facsimile copy of any signature shall be effective as an original signature.

Dated: September 25, 2009

Witness Signature: “Marcia Steer”
“Cory Edwin Griffiths”
Cory Edwin Griffiths
Print Name: Marcia Steer

“Mark Gordon”
Staff of the MFDA
Per: Mark Gordon
Executive Vice-President

Page 10 of 13

Schedule “A” Order
File No. 200916

IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Cory Edwin Griffiths



ORDER


WHEREAS on June 25, 2009, the Mutual Fund Dealers Association of Canada (the
“MFDA”) issued a Notice of Settlement Hearing pursuant to section 24.4 of By-law No. 1 in
respect of Cory Edwin Griffiths (the “Respondent”);

AND WHEREAS the Respondent entered into a settlement agreement with Staff of the
MFDA, dated September 25, 2009 (the “Settlement Agreement”), in which the Respondent
agreed to a proposed settlement of matters for which the Respondent could be disciplined
pursuant to sections 20 and 24.1 of By-law No. 1;

AND WHEREAS the Hearing Panel is of the opinion that:
• between June 2008 and October 2008, the Respondent falsified client
initials, client signatures and other information on the account opening
documents of clients MB, TB and CB, contrary to MFDA Rule 2.1.1; and
Page 11 of 13

• in October 2008, the Respondent interfered with the ability of the Member
to conduct a reasonable supervisory investigation of the Respondent’s
conduct by providing false and misleading responses to the Member in the
course of its investigation, before admitting to the falsifications, contrary
to MFDA Rules 1.1.2 and 2.5.1 and MFDA Rule 2.1.1.

IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a
consequence of which:

1.
If at any time a non-party to this proceeding requests production of or
access to exhibits in this proceeding that contain intimate financial or personal
information, then the MFDA Corporate Secretary shall not provide copies of or
access to the requested exhibits to the non-party without first redacting from
them any and all intimate financial or personal information, pursuant to Rules
1.8(2) and (5) of the MFDA Rules of Procedure;
2.
The Respondent shall pay a fine in the amount of $1,000.00, pursuant
to section 24.1.1(b) of By-law No. 1;
3.
The Respondent shall be suspended from acting as a mutual fund
salesperson for a period of 2 years, effective from the date of this Order and
pursuant to MFDA By-Law No. 1, section 24.1.1(c);
4.
The Respondent shall not pay any costs of the MFDA’s investigation
or of this proceeding.

DATED this ________ day of _________________, 2009.

Per: __________________________
________________________,
Chair
Page 12 of 13

Per: __________________________

________________________, Industry Representative

Per: __________________________

________________________, Industry Representative

Doc 189934
Page 13 of 13