Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Mohabeer Rambarran, consent and agree to settlement of this matter by way of this agreement (the “Settlement Agreement”).
2. Staff conducted an investigation of the Respondent’s activities which disclosed 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.

II. JOINT SETTLEMENT RECOMMENDATION

3. Staff and the Respondent jointly recommend that the Hearing Panel accept the Settlement Agreement.
4. The Respondent admits to the following violations of the By-laws, Rules or Policies of the MFDA:
   1. between September 2006 and August 2014, the Respondent obtained, possessed, and in some instances, used to process transactions, 51 pre-signed account forms in respect of 22 clients, contrary to MFDA Rule 2.1.1;
   2. between September 2006 and August 2014, the Respondent falsified, and in some instances, used to process transactions, 13 account forms in respect of 10 clients, contrary to MFDA Rule 2.1.1; and
   3. between September 2006 and August 2014, the Respondent, acting in the capacity of alternate branch manager, reviewed and approved 54 of the account forms described above in subparagraphs (b) and (c), contrary to MFDA Rules 2.5.5(f) (prior to September 2013, MFDA Rule 2.5.5(d)) and 2.1.1.
5. Staff and the Respondent agree and consent to the following terms of settlement:
   1. the Respondent shall pay a fine in the amount of $10,000 pursuant to s. 24.1.1(b) of MFDA By-law No. 1 (the “Fine”), payable in 4 installments in the amount of $2,500 each as follows:
      1. the first installment shall be paid on or before the last business day of the 3^rd month that follows the date of the acceptance of the Settlement Agreement by the Hearing Panel;
      2. the second installment shall be paid on or before the last business day of the 6^th month that follows the date of the acceptance of the Settlement Agreement by the Hearing Panel;
      3. the third installment shall be paid on or before the last business day of the 9^th month that follows the date of the acceptance of the Settlement Agreement by the Hearing Panel; and
      4. the fourth installment shall be paid on or before the last business day of the 12^th month that follows the date of the acceptance of the Settlement Agreement 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 is payable on the date of the Settlement Hearing;
   3. if the Respondent fails to make any of the installment payments described above in above subparagraph (a), then without further notice to the Respondent, the Respondent shall be summarily suspended from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member until the full amount of the Fine has been paid;
   4. the Respondent shall be prohibited from acting in the capacity of branch manager for a period of 5 months while in the employ of or associated with any Member of the MFDA, pursuant to s. 24.1.1(e) of MFDA By-law No.1;
   5. prior to being re-designated as a branch manager, the Respondent shall successfully complete the branch manager’s course offered by the Canadian Securities Institute in relation to the mutual fund industry;
   6. the Respondent shall in the future comply with MFDA Rules 2.1.1 and 2.5.5; and
   7. the Respondent will attend in person, on the date set for the Settlement Hearing.
6. Staff and the Respondent agree to the settlement on the basis of the facts set out in Part III herein and consent to the making of an Order in the form attached as Schedule “A”.

III. AGREED FACTS

Registration History

7. Since November 1995, the Respondent has been registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with PFSL Investments Canada Inc. (“PFSL”), a Member of the MFDA.
8. At all material times, PFSL designated the Respondent as the alternate branch manager in his branch.
9. At all material times, the Respondent conducted business in the Vaughan, Ontario area.

Pre-Signed Account Forms

10. At all material times, PFSL’s policies and procedures prohibited its Approved Persons, including the Respondent, from holding, obtaining, or using pre-signed account forms.
11. Between September 2006 and August 2014, the Respondent obtained, possessed, and in some instances, used to process transactions, 51 pre-signed redemption request forms in respect of 22 clients (the “Pre-Signed Account Forms”).
12. The Respondent submitted 45 of the Pre-Signed Account Forms to PFSL to process redemptions in client accounts.

Falsified Forms

13. Between September 2006 and August 2014, the Respondent falsified, and in some instances, used to process transactions, 13 redemption request forms in respect of 10 clients (the “Falsified Forms”).
14. The Respondent submitted 12 of the Falsified Forms to PFSL to process redemptions in client accounts.
15. The Respondent falsified the redemption request forms either by using liquid correction fluid to change information on the form, or by overwriting the already populated form with new information, without obtaining the client’s initials authorizing the change.

Approval of the Pre-Signed and Falsified Forms

16. Between September 2006 and August 2014, the Respondent, acting in the capacity of alternate branch manager, reviewed and approved 54 of the Pre-Signed Account Forms and Falsified Forms described above in paragraphs 10-15.

PFSL’s Investigation

17. Beginning in September 2014, PFSL’s compliance staff detected the conduct that is the subject of this Settlement Agreement as a result of a branch audit and subsequent follow-up review.
18. As part of its investigation, PFSL sent letters to all of the affected clients and a portion of the non-affected clients serviced by the Respondent in order to determine whether the Respondent had engaged in any unauthorized trading. No clients reported any concerns.

Additional Factors

19. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above beyond any commissions and fees that he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
20. There is no evidence of any client harm or that the transactions were unauthorized.
21. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
22. By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducing a full hearing of the allegations.

IV. ADDITIONAL TERMS OF SETTLEMENT

23. This settlement is agreed upon in accordance with section 24.4 of MFDA By-law No. 1 and Rules 14 and 15 of the MFDA Rules of Procedure.
24. The Settlement Agreement is subject to acceptance by the Hearing Panel which shall be sought at a hearing (the “Settlement Hearing”). At, or following the conclusion of, the Settlement Hearing, the Hearing Panel may either accept or reject the Settlement Agreement.
25. The Settlement Agreement shall become effective and binding upon the Respondent and Staff as of the date of its acceptance by the Hearing Panel. Unless otherwise stated, any monetary penalties and costs imposed upon the Respondent are payable immediately, and any suspensions, revocations, prohibitions, conditions or other terms of the Settlement Agreement shall commence, upon the effective date of the Settlement Agreement
26. Staff and the Respondent agree that if this Settlement Agreement is accepted by the Hearing Panel:
    1. the Settlement Agreement will constitute the entirety of the evidence to be submitted respecting the Respondent in this matter;
    2. the Respondent waives any 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;
    3. Staff will not initiate any proceeding under the By-laws of the MFDA against the Respondent in respect of the facts and the contraventions described in this Settlement Agreement. 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 this Settlement Agreement.  Furthermore, nothing in this Settlement Agreement shall relieve the Respondent from fulfilling any continuing regulatory obligations;
    4. 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; and
    5. 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 the Respondent.
27. If, for any reason, this Settlement Agreement is not accepted 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 the Settlement Agreement or the settlement negotiations.
28. Staff and the Respondent agree that the terms of the 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.
29. The Settlement Agreement may be signed in one or more counterparts which together shall constitute a binding agreement. A facsimile copy of any signature shall be effective as an original signature.