SA201324-2 | MFDA

File No.

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:

Settlement Agreement

Settlement Agreement
File No. 201324

I.
INTRODUCTION

1.
By Notice of Settlement Hearing, the Mutual Fund Dealers Association of Canada (the
“MFDA”) will announce that it proposes to hold a hearing to consider whether, pursuant to
section 24.4 of By-law No. 1, a hearing panel of the Central 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 the Respondent, Jeffrey Hanford Harold
Young.

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 22

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 Part
X) or any civil or other proceedings which may be brought by any other person or agency,
whether or not this Settlement Agreement is accepted by the Hearing Panel.

IV.
AGREED FACTS

Registration History

6.
From October 1998 to February 11, 2009, Young was registered in Ontario as a mutual
fund salesperson with Sun Life Financial Investment Services (Canada) Inc. (“Sun Life”), a
Member of the MFDA. From October 25, 2004 to October 31, 2008, Young was also registered
with Sun Life as a branch manager.

7.
As a result of the events described herein, Young resigned from Sun Life on February 11,
2009. He is not currently registered in the securities industry in any capacity.

Universal Settlements International Inc.
Page 2 of 22

8.
From June 2006 to December 2008, the Respondent worked closely with Don Everett
Andrews (“Andrews”) while they were registered with Sun Life. The Respondent acted as
Andrews’ branch manager and mentor. The Respondent and Andrews often shared joint advisor
codes and responsibilities for servicing client accounts.

9.
Commencing in or about 2000, the Respondent became aware of an Ontario corporation
known as Universal Settlements International Inc. (“USI Corp.”). USI Corp.’s business involved
finding individuals to invest in viatical settlements1 and American viators interested in selling
their existing life insurance policies for an agreed upon lump sum.2 In order to find interested
investors, USI Corp. contracted with at least 1,200 independent contractors who agreed to sell,
recommend, refer or facilitate the sale of its viatical settlements to individuals in return for a
sales commission, referral fee or other form of compensation.3

10.
In or about 2000, the Respondent commenced selling, recommending, referring or
facilitating the sale of USI Corp. viatical settlements to clients of Sun Life and other individuals.

11.
Andrews became an independent contractor of USI Corp. in 2007 after being introduced
to the company by the Respondent. Commencing in 2007, Andrews worked with the
Respondent to sell, recommend, refer or facilitate the sale of USI Corp. viatical settlements to
Sun Life clients and other individuals.

12.
Between 2006 and 2008, the Respondent worked with Andrews, either separately or
jointly, and sold, recommended, referred or facilitated the sale of USI Corp. viatical settlements
to at least 8 Sun Life clients and 10 other individuals, as follows:

1 A viatical settlement is the sale of a life insurance policy by the policy owner to a third party for an amount greater
than the current cash surrender value of the policy but less than its net death benefit. The policy owner receives a
lump sum cash settlement at the time of sale. The third party becomes the new owner of the policy, pays the annual
premiums and is entitled to receive the net death benefit when the insured dies.
2 On September 29, 2006, following an enforcement proceeding before the Ontario Securities Commission (“OSC”),
viatical products offered by USI Corp. were determined by the OSC to be investment contracts under s.1(1) of the
Act and, therefore, securities (“the OSC Decision”).
3 The sentence refers to a finding of fact made by the OSC at paragraph 11 of OSC Decision.

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Client Name
Member Client
Amount
DH and EH
Yes
Unknown
AM and AnM
Yes
Unknown
CS
Yes
Unknown
CM and KM
Yes
Unknown
RY
No
Unknown
DB and LB
No
Unknown
AV
No
Unknown
BG and SG
No
Unknown
JS
No
Unknown
AdM
No
Unknown
JD
No
Unknown
TG
No
Unknown

13.
The total amount of the USI Corp. viatical settlements sold by the Respondent and
Andrews is not known to Staff. The Respondent believes that he and Andrews sold,
recommended, referred or facilitated the sale of at least $880,000 USI Corp. viatical settlements
between 2007 and 2008. The Respondent states he no longer has possession of, or access to, the
records relating to their sales activity. MFDA Staff has been unable to obtain records of their
sales activity through other means.

14.
The Respondent admits that between 2007 and 2008, he and Andrews received referral
fees or commissions from USI Corp. totaling $26,400, which fees or commissions they shared
equally ($13,200 apiece). Commencing in the summer of 2007, these fees or commissions were
paid to Andrews’ company, High Velocity Performance and Sports Ltd. (“HVPS”). Andrews then
provided the Respondent with his share of the fees or commissions by making a cheque payable to
the Respondent’s wife, VY.

15.
The Respondent admits that for the period between 2000 and 2007, prior to Andrews’
involvement with the USI Corp. viatical settlements,4 he generated fees or commissions from
USI Corp. in the amount of $83,600, of which he was entitled to receive half ($41,800). These
fees were paid to him by USI Corp. via Kechnie Financial Group (“KFG”) from 2000 to

4 Andrews had previously sought and obtained approval from Sun Life to operate HVPS , although not for the
purposes described at paragraphs 14 to 16. Andrews incorporated HVPS to provide personal training and coaching
services.

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December 31, 20035 then via his company, Kechnie Health and Wealth Management Inc.
(“KHWM”)6, from January 1, 2004 to 2006. Therefore, between 2000 and 2008, the Respondent
received fees or commissions from USI Corp. in the total amount of $55,000 ($41,800 plus
$13,200).

16.
Between 2007 and 2008, all sales of the USI Corp. viatical settlements to the clients and
individuals referred to above in paragraph 12 were processed through HVPS as follows:

a) The Respondent completed contracts or subscription agreements for the purchase of
USI Corp. viatical settlement with the affected clients or individuals following which,
either the Respondent or the clients or individuals would send the completed
documents to Andrews;

b) Andrews would, in the capacity of an advisor or representative with HVPS, sign the
completed contracts or subscription agreements given to him by the Respondent or
clients;

c) Andrews then received commissions or fees from USI Corp. which he deposited into
HVPS’s bank account; and

d) These commissions or fees were split equally between the Respondent and Andrews
as follows:

(i)
50% of the commission or fee remained in HVPS’s bank account; and
(ii)
50% was sent to Young, but by way of cheques made payable to Young’s
wife or daughter;

17.
The viatical settlements offered by USI Corp. were not investment products approved by
Sun Life for sale by its Approved Persons, including the Respondent and Andrews. The sales of

5 At Sun Life’s request, the Respondent became a shareholder of KFG on or about January 1, 2004, at which time
KFG was renamed Kechnie Young Financial Group Inc. (“KYFG”). Commencing January 1, 2004, Sun Life paid
all compensation owing to the Respondent via KYFG. Prior to January 1, 2004, Sun Life paid all compensation
owing to the Respondent directly to the Respondent.
6 KHWM was a corporation in which the Respondent was one of 3 shareholders and which was disclosed to, and
approved by, Sun Life, although not for the purposes described at paragraphs 14 to 16.

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the USI Corp. viatical settlements to Sun Life clients and other individuals were not carried on
for the account or through the facilities of Sun Life.

18.
On December 2, 2008, USI Corp. made an application to the Ontario Superior Court of
Justice to commence proceedings pursuant to the Ontario Companies’ Creditors Arrangement
Act (the “CCAA Application”). As a result of the CCAA Application, the Court made an order
granting USI Corp. protection from its creditors while it restructured its affairs. USI Corp.’s
subsequent restructuring resulted in the nominal value of the USI Corp.’s viatical settlements,
without any return on investment, being repaid in full to investors, including the clients and
individuals described at paragraph 12 above.

19.
At no time did the Respondent or Andrews seek or obtain approval from Sun Life to
commence or continue their involvement in USI Corp. or to, as the case may be, sell,
recommend, refer or facilitate the sale of the USI Corp. viatical settlements to clients of Sun Life
or other individuals.

20.
Sun Life did not have a referral arrangement with USI Corp. with respect to the sale or
referral of its viatical settlements.

Aslan Holding Corporation

21.
On August 13, 2008, the Respondent’s wife, VY, and another individual, CT,
incorporated Aslan Holding Corporation (“AHC Corp.”) in Ontario. VY and CT became
shareholders and directors of AHC Corp. CT’s husband, JT, became AHC Corp.’s President and
C.E.O. At all material times, Young and JT (and as of September 2008, Andrews) participated
in, or actively advised on, AHC Corp.’s operations; they corresponded with AHC Corp.’s legal
counsel, met and corresponded with third parties with whom AHC Corp. conducted, or intended
to conduct, business, met with potential investors (including Sun Life clients for whom the
Respondent was the servicing mutual fund salesperson) and regularly held, attended and
participated at management meetings or other meetings where decisions about AHC Corp.’s
affairs were discussed and made. In addition, the Respondent and JT (and as of September 2008,

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Andrews) regularly discussed AHC Corp.’s operations and exchanged emails, or otherwise held
meetings, about the company.

22.
The Respondent states that he was not a director or an officer for AHC Corp. Rather, he
states that he assisted AHC Corp. as financial advisor or consultant, when requested by JT, CT or
VY.

23.
AHC Corp. was formed with the intention to borrow monies from investors at a fixed rate
of return for the purposes of making investments in speculative ventures. In particular, AHC
Corp. intended to offer to investors principal protected notes offering a return of at least 2% per
month (the “AHC Investment”)..

24.
The speculative venture investments that AHC Corp. participated in included: (1) the
purchase of promissory notes offered by Capital Interest LLC, a Nevada limited liability
corporation; and (2) through Capital Interest LLC, the purchase of securities offered by a
Nevada-based corporation known as Axcess Automation, LLC (“Axcess”).7 On May 9, 2009,
the United States Securities and Exchange Commission obtained a court order halting the
operations of Axcess, alleging that commencing February 2006 the company operated a Ponzi
scheme pursuant to which it raised $14.1 million from investors by promising weekly returns of
up to 5 percent from trading in futures.

25.
In or about September 2008, Andrews became involved in AHC Corp.’s operations
including, among other matters: (1) negotiations held between AHC Corp. and other companies
in which AHC Corp. sought to invest;8 and (2) the sale, referral or recommendation of the AHC
Investment to Sun Life clients and other individuals.

26.
The Respondent states that Andrews was not a director or an officer for AHC Corp.
Rather, he states that Andrews, like the Respondent, assisted AHC Corp. as financial advisor or
consultant, when requested to do so by JT, CT or VY.

7 The Respondent states that AHC Corp. did not have any direct dealings with Axcess. Rather, he states that Capital
Interest LLC acted as the broker for Axcess.
8 Including negotiations with USI Corp.

Page 7 of 22

27.
In or about November 2008, Andrews or Andrews’s wife agreed to purchase US$25,000
of the AHC Investment. Nevertheless, the Respondent states that rather than make a payment in
the amount of US$25,000, Andrews or Andrews’ wife tendered a payment of CAD$25,000.
Further, Andrews’s desired investment could not be forwarded within the timelines required by
AHC Corp. The Respondent therefore states that neither Andrews nor Andrews’ wife ever
purchased US$25,000 of the AHC Investment.

28.
Between September 2008 and early December 2008, the Respondent recommended,
referred and facilitated the sale of the AHC Investment totaling at least $700,0009 to at least the
following 5 clients of Sun Life: BM, DB, DS, AM and MT.

29.
For his efforts in recommending, referring or facilitating the sale of the AHC Investments
to these 5 Sun Life clients, the Respondent received, or became entitled to receive, referral fees
or commissions from AHC Corp. totaling at least $57,000. The Respondent states that these
referral fees or commissions totaling $57,000 were paid by AHC Corp. to VY.

30.
For his efforts in selling, recommending, referring or facilitating the sale of the AHC
Investments to Sun Life clients, Andrews received referral fees or commissions from AHC Corp.
totaling at least $5,000. The $5,000 fee was paid by AHC Corp. to Andrews’s wife, KA, in her
capacity as an employee of HVPS. The Respondent states that a short time after the $5,000 fee
was paid by AHC Corp. to Andrews’s wife, Andrews repaid the full amount to AHC Corp. using
a credit card cheque.

31.
Primarily as a result the United States Securities and Exchange Commission halting of
Axcess’s operations,10 all individuals who purchased the AHC Investment, including clients BM,
DB, DS, AM and MT, lost the totality of their investments.

9 In total, between September 2008 and December 2008 AHC Corp. sold $2,225,405 of the AHC Investments to 13
investors.
10 See paragraph 24 above.

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32.
The AHC Investment was not an investment product approved by Sun Life for sale by its
Approved Persons, including the Respondent. The sales of the AHC Investment to the Sun Life
clients were not carried on for the account or through the facilities of Sun Life.

33.
At no time did the Respondent or Andrews seek or obtain approval from Sun Life to
commence or continue their involvement in AHC Corp. or to, as the case may be, sell,
recommend or facilitate the sale of the AHC Investment to clients of Sun Life or other
individuals.

SPF Music Group Inc.

34.
On August 3, 2006, the Respondent became a director of an Ontario corporation known
as SPF Music Group Inc. (“SPF Corp.”). SPF Corp. was incorporated by a long-time friend of
the Respondent. SPF Corp. intended to operate in the music industry, acting as a record label, a
publishing company and a production company for various artists.

35.
In August 2007, the Respondent recommended, referred or facilitated the sale of SPF
Corp. shares totaling $10,000 to an individual known as SD.

36.
In addition, in August 2007 the Respondent recommended SPF Corp. shares to at least
two other individuals: JD and MD (both of whom were not clients of Sun Life). JD and MD did
not purchase SPF Corp. shares.

37.
SPF Corp. shares were not an investment approved by Sun Life for sale by its Approved
Persons, including the Respondent. The recommendation, referral or facilitation of the sale of
SPF Corp. shares to SD by the Respondent was not carried on for the account or through the
facilities of Sun Life.

38.
At no time did the Respondent seek or obtain approval from Sun Life to commence or
continue his involvement in SPF Corp. or to recommend, refer or facilitate the sale of the SPF
Corp. shares to clients of Sun Life or other individuals.

Page 9 of 22

Sun Life’s Policies and Procedures

39.
At all material times, Sun Life’s policies and procedures prohibited its Approved Persons
from:

a) recommending, selling or trading investment products that were not approved for sale
by Sun Life;
b) trading or advising in any securities outside the facilities of Sun Life;
c) engaging in another gainful occupation that was not disclosed to and approved by Sun
Life;
d) serving as an officer, director or partner of third party organizations that were not
disclosed to and approved by Sun Life; and
e) entering into referral arrangements with third parties.

Referral Arrangement Entered Into By the Respondent

40.
On January 1, 2007, Young, through KYFG, entered into a referral arrangement with a
corporation known as 9905009 Ontario Inc. (“9905009”) whereby KYFG agreed to pay a referral
fee of between $300 and $500 to 9905009 for every client referred to KYFG by 9905009 who
became Sun Life mutual fund clients or purchased life insurance policies.

41.
Between January 1, 2007 and July 2007, 9905009 referred at least 7 individuals to KYFG
who became Sun Life clients: AM and AnM, MW, EL, JH, MH and A-Corp. AM and AnM also
invested in the USI Corp. viatical settlements.11

42.
The Respondent states that he discussed with his Sun Life branch manager and
compliance officer that he, or KYFG, was permitted to pay a referral fee to third parties. The

11 Staff is unaware of the total of the total amount of referral fees paid by the Respondent or KYFG to 9905009
pursuant to the referral arrangement between the parties. The Respondent states that he does not recall the quantum
of referral fees paid to 9905009 and does not have access to records detailing these fees.

Page 10 of 22

Respondent states that on the basis of this conversation he mistakenly understood Sun Life to
was permitting him to enter into referral arrangements. The Respondent now admits that,
pursuant to Sun Life’s policies and procedures, as well as MFDA Rule 2.4.2(b), he was required
to obtain written approval from Sun Life for such referral arrangements and that his actions, as
described herein, contravened those requirements. The Respondent further admits that the
referral arrangement between KYFG and 9905009, even if properly disclosed to Sun Life,
contravened the Member’s policies and procedures and MFDA Rule 2.4.2(b), and therefore
could not have been properly approved by Sun Life given that all referrals and associated fees
must flow through the dealer and not individual Approved Persons.

The Respondent’s Failure to Cooperate

43.
On February 23, 2010, the Respondent attended an interview with MFDA Staff pursuant
to section 22.1 of MFDA By-Law No. 1 with respect to, among other matters, his involvement
with USI Corp., AHC Corp. and HVPS (the “Interview”).

44.
During the Interview, MFDA Staff asked the Respondent a number of questions that the
Respondent refused to answer relating to his activities with USI Corp., AHC Corp. and HVPS,
including the following, among others (the “Refused Questions”):

1. questions relating to a non-disclosure agreement entered into by the Respondent
and USI Corp., among other parties;

2. questions relating to the number of clients or other individuals to whom the
Respondent recommended, referred or facilitated the sale the AHC Investment,
including the identity of some of the clients’ or other individuals’ names and the
amounts they invested in the AHC Investment, commissions relating to each sale
facilitated by the Respondent; and

3. questions relating to agreements entered into between the Respondent or other
principals of AHC Corp. in relation to the affairs of AHC Corp.

45.
Despite repeated requests sent by MFDA Staff to the Respondent that he provide
responses to the Refused Questions, at no time has the Respondent answered them, in full or in
part.

Page 11 of 22

46.
The Respondent declined to answer the questions on the advice of his counsel, on the
basis that answering the questions may put him in a position of breaching confidentiality
agreements the Respondent had executed with respect to information regarding USI Corp. and
AHC Corp.

47.
Commencing February 26, 2010, Staff attempted to arrange for a follow-up interview
with the Respondent and his counsel to discuss, among other matters, his involvement in, and
activities relating to, SPF Corp. Due to ongoing health concerns requiring medical attention, and
pursuant to the advice of doctors who felt that to do so would be detrimental to his health12, the
Respondent was not able to schedule any further interviews with Staff. The health issues that
prevented the Respondent from scheduling further interviews with Staff continue to this day and
his health is currently compromised and fragile.

48.
Due to the Respondent’s failure to answer the Refused Questions Staff has been unable to
fully determine, among other things:

a) the true nature and extent of his activities in selling, recommending, referring and
facilitating the sale of USI Corp. viatical settlements to Sun Life clients and other
individuals; and
b) the true nature and extent of his activities in recommending, referring and facilitating
the sale of AHC Investments to Sun Life clients and other individuals.

V.
THE RESPONDENT’S POSITION

49.
The Respondent states that he has paid a heavy price for his non-compliance with the
regulatory requirements at issue in this matter, including the loss of his business and his personal
reputation. He states that the events that led to his resignation from Sun Life on February 11,
2009, the ongoing investigation in this matter and the within proceeding have all had a

12 The Respondent provided to Staff notes from his doctors dated May 17, 2010, September 16, 2010 and November
28, 2011.

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devastating impact on his health and financial well-being. Indeed, the Respondent states that the
loss of his business has contributed to struggles to support his family and his child having to
leave school.

50.
Though he states that he did not realize the compliance issues raised by his conduct, the
Respondent nevertheless admits that, by virtue of his long-time involvement in the industry,
including his registration as a branch manager, he ought to have known that his admitted-to
conduct was in violation of the Member’s policies and procedures and MFDA Rules, Policies
and By-laws. He regrets his conduct and fully accepts responsibility for his actions, including
the consequential penalties agreed to herein.

51.
The Respondent does not wish, nor does he expect, to ever be registered in the securities
industry again.

VI.
CONTRAVENTIONS

52.
By engaging in the conduct described above, the Respondent admits the following:

a) By selling, recommending, referring or facilitating the sale of:

(i)
USI Corp. viatical settlements to at least 8 Sun Life clients and 10 other
individuals between 2007 and 2008 via HVPS, USI Corp. viatical
settlements between 2000 and 2004 via KFG, and USI Corp. viatical
settlements between 2004 and 2006 via KHMW;
(ii)
$700,000 of the AHC Investments to at least 5 clients of Sun Life in 2008-
2008; and
(iii)
at least $10,000 of SPF Corp. shares to at least 1 individual in August
2007;
the Respondent engaged in securities related business that was not carried on for the
account and through the facilities of Sun Life, contrary to MFDA Rules 1.1.1(a) and
2.1.1.

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b) Between 2006 and 2008, the Respondent had and continued in other gainful
occupations that were not disclosed to and approved by the Member by:

(i)
recommending, referring or facilitating the sale of investments offered by
USI Corp.; and
(ii)
recommending, referring or facilitating the sale of investments offered by
AHC Corp.;
contrary to MFDA Rules 1.2.1(d)13 and 2.1.1.

c) Between 2006 and 2008, the Respondent engaged in activities that gave rise to
conflicts or potential conflicts of interest between his interests and the interests of
clients of the Member, which conflicts he failed to address by the exercise of
responsible business judgment influenced only by the best interests of the clients, by
recommending, referring or facilitating the sale of investments in companies in which
they had a direct or indirect interest as described above, having regard to the sale of:

(i)
$700,000 of an exempt market investment product offered by AHC Corp.
to at least 5 clients; and
(ii)
$10,000 of shares in SPF Corp. to one individual

contrary to MFDA Rules 2.1.4 and 2.1.1

d) Between 2000 and 2008, the Respondent entered into a referral arrangement with:

(i)
USI Corp. in respect of the sale of viatical settlements pursuant to which
he was paid or entitled to receive referral fees or commissions totaling at
least $55,000; and
(ii)
9905009, pursuant to which the Respondent directly or indirectly paid, or

13 Effective February 2011, the MFDA’s Rules were amended. As a result, MFDA Rule 1.2.1(d), which was in
force during the material time, was renumbered as current MFDA Rule 1.2.1(c). The wording of the rule was not
changed.

Page 14 of 22

was required to pay, fees in exchange for the referral of mutual fund
clients and life insurance clients to 9905009;

contrary to MFDA Rules 2.4.2(b) and 2.1.1; and

e) Commencing February 23, 2010, the Respondent has failed to answer questions
requested by the MFDA during the course of an investigation, contrary to section
22.1 of MFDA By-law No. 1.

VII.
TERMS OF SETTLEMENT

53.
The Respondent agrees to the following terms of settlement:

a) He shall pay a fine in the amount of $7,500, pursuant to section 24.1(b) of By-law
No. 1, upon the acceptance of this Settlement Agreement;
b) He shall be permanently prohibited from acting as a mutual fund salesperson,
pursuant to section 24.1(d) of By-law No. 1, commencing on the date of acceptance
of this Settlement Agreement; and;
c) He shall pay the costs of this proceeding in the amount of $5,000, pursuant to section
24.2 of By-law No. 1, upon the acceptance of this Settlement Agreement.

VIII. STAFF COMMITMENT

54.
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 the facts set out
in Part IV and the contraventions described in Part V of this Settlement Agreement, subject to
the provisions of Part X below. Nothing in this Settlement Agreement precludes Staff from
investigating or initiating proceedings in respect of any facts and contraventions that are not set
out in Parts IV and VI of this Settlement Agreement or in respect of conduct that occurred
outside the specified date ranges of the facts and contraventions set out in Parts IV and VI,
whether known or unknown at the time of settlement. Furthermore, nothing in this Settlement

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Agreement shall relieve the Respondent from fulfilling any continuing regulatory obligations.

IX.
PROCEDURE FOR APPROVAL OF SETTLEMENT

55.
Acceptance of this Settlement Agreement shall be sought at a hearing of the Central
Regional Council of the MFDA on a date agreed to by counsel for Staff and the Respondent.

56.
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 its 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.

57.
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 Hearing
Panel pursuant to s. 24.1.2 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.

58.
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 it him.

X.
FAILURE TO HONOUR SETTLEMENT AGREEMENT

59.
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 section 24.3 of the By-laws of the MFDA against the
Respondent based on, but not limited to, the facts and contraventions set out in Parts IV and VI

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of the Settlement Agreement, as well as the breach of the Settlement Agreement. If such
additional enforcement action is taken, the Respondent agrees that the proceeding(s) may be
heard and determined by a hearing panel comprised of all or some of the same members of the
hearing panel that accepted the Settlement Agreement, if available.

XI.
NON-ACCEPTANCE OF SETTLEMENT AGREEMENT

60.
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.

61.
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.

XII.
DISCLOSURE OF AGREEMENT

62.
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.

63.
Any obligations of confidentiality shall terminate upon acceptance of this Settlement
Agreement by the Hearing Panel.

XIII. EXECUTION OF SETTLEMENT AGREEMENT

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64.
This Settlement Agreement may be signed in one or more counterparts which together
shall constitute a binding agreement.

65.
A facsimile copy of any signature shall be effective as an original signature.

Dated this 4th day of April, 2014.

Milena Protich

“Jeffrey Hanford Harold Young”
Witness – Signature

Jeffrey Hanford Harold Young

“Milena Protich”
Witness – Print name

“Shaun Devlin”

Staff of the MFDA
Per: Shaun Devlin
Senior Vice-President,
Member Regulation – Enforcement

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Schedule “A”
Order
File No. 201324

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: Jeffrey Hanford Harold Young

ORDER

WHEREAS on [date], 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
Jeffrey Hanford Harold Young (the “Respondent”)

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

AND WHEREAS the Hearing Panel is of the opinion that:

1.
By selling, recommending, referring or facilitating the sale of:
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(i)
Viatical settlements offered by Universal Settlements International Inc. (“USI
Corp.”) to at least 8 Sun Life clients and 10 other individuals between 2000 and
2008;
(ii)
$700,000 in notes from Aslan Holding Corporation (“AHC Corp.”) to at least 5
clients of Sun Life in 2008; and

(iii)
at least a $10,000 investment in SPF Music Group Inc. (“SPF Corp.”) to at least
1 individual in August 2007;

the Respondent engaged in securities related business that was not carried on for the
account and through the facilities of Sun Life, contrary to MFDA Rules 1.1.1(a) and
2.1.1;

2.
Between 2006 and 2008, the Respondent had and continued in other gainful occupations
that were not disclosed to and approved by the Member by:

(i)
Selling, recommending, referring or facilitating the sale of investments offered
by USI Corp.; and

(ii)
recommending, referring or facilitating the sale of investments offered by AHC
Corp..;

contrary to MFDA Rules 1.2.1(d)14 and 2.1.1.

3.
Between 2006 and 2008, the Respondent engaged in activities that gave rise to conflicts
or potential conflicts of interest between his interests and the interests of clients of the Member,
which conflicts he failed to address by the exercise of responsible business judgment influenced
only by the best interests of the clients, by recommending, referring or facilitating the sale of

14 Effective February 2011, the MFDA’s Rules were amended. As a result, MFDA Rule 1.2.1(d), which was in
force during the material time, was renumbered as current MFDA Rule 1.2.1(c). The wording of the rule was not
changed.
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investments in companies in which they had a direct or indirect interest as described above,
having regard to the sale of:

(i)
$700,000 of an exempt market investment product offered by AHC Corp. to at
least 5 clients; and

(ii)
a $10,000 investment in SPF Corp. to one individual;

contrary to MFDA Rules 2.1.4 and 2.1.1.

4.
Between 2000 and 2008, the Respondent entered into a referral arrangement with:

(i)
USI Corp. in respect of the sale of viatical settlements pursuant to which he was
paid or entitled to receive referral fees or commissions totaling at least $55,000;
and

(ii)
9905009 Ontario Inc. (“9905009”), pursuant to which the Respondent directly
or indirectly paid, or was required to pay, fees in exchange for the referral of
mutual fund clients and life insurance clients to 9905009;

contrary to MFDA Rules 2.4.2(b) and 2.1.1; and

5.
Commencing February 23, 2010, the Respondent has failed to answer questions
requested by the MFDA during the course of an investigation, contrary to section 22.1 of MFDA
By-law No. 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, any
materials filed in, or the record of, this proceeding, including all exhibits and transcripts, then the
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MFDA Corporate Secretary shall not provide copies of, or access to, the requested documents 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 be permanently prohibited from acting as a mutual fund
salesperson, pursuant to section 24.1(d) of By-law No. 1, commencing on the date of acceptance
of this Settlement Agreement;

3.
The Respondent shall pay a fine in the amount of $7,500, pursuant to section 24.1(b) of
By-law No. 1, upon the acceptance of this Settlement Agreement; and

4.
The Respondent shall pay the costs of this proceeding in the amount of $5,000, pursuant
to section 24.2 of By-law No. 1, upon the acceptance of this Settlement Agreement.

DATED this [day] day of [month], 20[ ].

Per: __________________________

[Name of Public Representative], Chair

Per: _________________________

[Name of Industry Representative]

Per: _________________________

[Name of Industry Representative]

DM 375633 v1
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