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. 201423
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: Robert Kelly Kujala
SETTLEMENT AGREEMENT
I.
INTRODUCTION
1.
By way of a news release, 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 Pacific 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 Robert Kelly Kujala (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.
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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
IX) 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.
Since 1993, the Respondent has been registered in British Columbia as a mutual fund
salesperson (now known as a Dealing Representative) and, since 1997 as a branch manager with
PFSL Investments Canada Ltd. (“PFSL”), a Member of the MFDA.
7.
At all material times, the Respondent conducted business at a PFSL branch located in
Coquitlam, British Columbia.
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Partially Complete Pre-Signed Letters of Direction
8.
At all material times, PFSL’s policies and procedures prohibited its Approved Persons
from using pre-signed client forms.
9.
On July 31, 2013, PFSL’s Field Audit Department conducted a routine on-site audit of
the Respondent’s Coquitlam branch and found that the Respondent had obtained and used 11
partially complete pre-signed Letters of Direction (“LODs”) to process transactions for three
clients. As a result, PFSL’s Field Audit staff conducted a further review of the Respondent’s
client files and found 16 additional instances where the Respondent had obtained and used
partially complete LODs to process transactions for five clients.
10.
The Respondent states that each time he received a partially complete pre-signed LOD to
process a redemption request transaction in an affected client’s account, he would contact the
clients by telephone to obtain further clarification and instructions regarding the amount to be
redeemed from the client’s account. The Respondent would then fill in the incomplete portions
of the LOD based on his conversation with the client.
11.
Staff’s investigation did not reveal any evidence of misappropriation, unauthorized
trading, client harm, or client complaints in this matter.
12.
Staff’s investigation did not reveal any evidence that the Respondent received any
financial benefit from engaging in the misconduct beyond the commissions or fees to which he
would have been ordinarily entitled had the transactions in the clients’ accounts been carried out
in the proper manner.
13.
The Respondent has no prior disciplinary history with the MFDA. He cooperated with
Staff during the course of the investigation, and by agreeing to this settlement, has avoided the
necessity of the MFDA conducting a full hearing on the merits.
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14.
The Respondent admits that, from March 10, 2009 to May 2, 2013, he obtained, and used
27 partially completed, pre-signed LOD redemption requests to process transactions for eight
clients, contrary to MFDA Rule 2.1.1.
VI.
TERMS OF SETTLEMENT
15.
The Respondent agrees to the following terms of settlement:
i).
the Respondent shall pay a fine in the amount of $5,000 pursuant to s. 24.1.1(b) of
MFDA By-law No. 1, payable in five (5) monthly installments of $1,000
commencing one month after the Settlement Agreement is accepted by the Hearing
Panel;
ii).
the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA
By-law No. 1, payable within 30 days of the date the Settlement Agreement is
accepted by the Hearing Panel;
iii).
the Respondent shall be prohibited from acting as a branch manager or in any
supervisory capacity for a Member of the MFDA for a period of three (3) months
commencing upon the date the Settlement Agreement is accepted by the Hearing
Panel, pursuant to s. 24.1.1 of By-law No. 1;
iv).
If the Respondent fails to comply with the provisions of subparagraphs i) and/or ii),
the authority of the Respondent to conduct securities related business while in the
employ of or associated with a Member of the MFDA shall be immediately
suspended without further notice or order of the Hearing Panel until such time as the
Respondent demonstrates to the satisfaction of Staff that he has complied with the
provisions of subparagraph i);
v).
the Respondent shall attend in person at the Settlement Hearing; and
vi).
the Respondent shall in the future comply with all MFDA By-laws, Rules and
Policies, and all applicable securities legislation and regulations made thereunder,
including MFDA Rules 2.1.1.
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16.
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 IX 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 V 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 V, whether
known or unknown at the time of settlement. Furthermore, nothing in this Settlement Agreement
shall relieve the Respondent from fulfilling any continuing regulatory obligations.
VIII. PROCEDURE FOR APPROVAL OF SETTLEMENT
17.
Acceptance of this Settlement Agreement shall be sought at a hearing of the Pacific
Regional Council of the MFDA on a date agreed to by counsel for Staff and the Respondent.
18.
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.
19.
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.
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20.
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.
IX.
FAILURE TO HONOUR SETTLEMENT AGREEMENT
21.
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 set out in Part IV 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.
X.
NON-ACCEPTANCE OF SETTLEMENT AGREEMENT
22.
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.
23.
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.
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24.
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.
25.
Any obligations of confidentiality shall terminate upon acceptance of this Settlement
Agreement by the Hearing Panel.
XII.
EXECUTION OF SETTLEMENT AGREEMENT
26.
This Settlement Agreement may be signed in one or more counterparts which together
shall constitute a binding agreement.
27.
A facsimile copy of any signature shall be effective as an original signature.
DATED this 6th day of May, 2015.
“Michael Kujala”
“Robert Kelly Kujala”
Witness – Signature
Robert Kelly Kujala
Michael Kujala
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. 201423
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: Robert Kelly Kujala
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
Robert Kelly Kujala (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, from March 10, 2009 to May
2, 2013, the Respondent obtained and used 27 partially complete pre-signed LODs to process
transactions for eight clients, contrary to MFDA Rule 2.1.1;
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IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a
consequence of which:
1.
The Respondent shall pay a fine in the amount of $5,000 pursuant to s. 24.1.1(b) of
MFDA By-law No. 1, payable in five (5) monthly installments of $1,000 commencing one
month after the Settlement Agreement is accepted by the Hearing Panel;
2.
The Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA
By-law No. 1, payable within 30 days of the date the Settlement Agreement is accepted by the
Hearing Panel;
3.
The Respondent shall be prohibited from acting as a branch manager or in any
supervisory capacity for a Member of the MFDA for a period of three (3) months commencing
upon the date the Settlement Agreement is accepted by the Hearing Panel, pursuant to s. 24.1.1
of By-law No. 1;
4.
If the Respondent fails to comply with the provisions of paragraphs 1 and/or 2, the
authority of the Respondent to conduct securities related business while in the employ of or
associated with a Member of the MFDA shall be immediately suspended without further notice
or order of the Hearing Panel until such time as the Respondent demonstrates to the satisfaction
of Staff that he has complied with the provisions of paragraphs 1 and/or 2;
5.
The Respondent shall in the future comply with all MFDA By-laws, Rules and Policies,
and all applicable securities legislation and regulations made thereunder, including MFDA Rules
2.1.1.
6.
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
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.
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DATED this [day] day of [month], 20[ ].
Per: __________________________
[Name of Public Representative], Chair
Per: _________________________
[Name of Industry Representative]
Per: _________________________
[Name of Industry Representative]
DM 427637 v1
Page
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