Settlement Agreement

I. INTRODUCTION 

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Leonard Ambrose Doyle, 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 August 2004 and March 2015, the Respondent, or his assistants, for whom he was responsible, altered, and in some instances, used to process transactions, 145 account forms by altering information on the account forms without obtaining client initials authorizing the alterations, contrary to MFDA Rule 2.1.1; and
   2. between August 2004 and March 2015, the Respondent, or his assistants, for whom he was responsible, obtained, possessed, and in some instances, used to process transactions, 246 pre-signed account forms, contrary to MFDA Rule 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 $15,000 pursuant to s. 24.1.1(b) of MFDA By-law No. 1;
   2. the Respondent shall be prohibited from conducting securities related business in any capacity while in the employ or associated with any MFDA Member for a period of one year, commencing from the date of the Hearing Panel’s order, pursuant to s. 24.1.1(e) of MFDA By-law No. 1;
   3. the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA By-law No. 1;
   4. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
   5. 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 1993, the Respondent has been registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with Sun Life Financial Investment Services (Canada) Inc. (“Sun Life”)[1], a Member of the MFDA.

8. At all material times, the Respondent conducted business in the Niagara Falls, Ontario area.

9. At all material times, the Respondent operated his business employing of one or more assistants. From February 2008 onwards, at least one of the assistants was registered in Ontario as a mutual fund salesperson.

10. The Respondent was responsible for ensuring that any work he delegated to the assistants, including completing account forms with client information, which the assistants then submitted to Sun Life for processing, was compliant with Sun Life and the MFDA’s policies, procedures, rules, and directions. 

Altered Account Forms

11. Between August 2004 and March 2015, the Respondent, or his assistants, for whom he was responsible, altered, and in some instances, used to process transactions, 145 account forms by altering information on the account forms without obtaining client initials authorizing the changes.

12. The altered forms included Pre-Authorized Contribution forms, Order forms, and New Account Application forms.

13. In the instances where one of the Respondent’s assistants altered the account forms, the Respondent knew or ought to have known that the account forms were altered.

Pre-Signed Account Forms

14. Between August 2004 and March 2015, the Respondent, or his assistants, for whom he was responsible, obtained, possessed, and in some instances, used to process transactions, 246 pre-signed account forms.

15. The Pre-Signed Account Forms included Pre-Authorized Contribution forms, Order forms, and New Account Application forms.

16. In the instances where one of the Respondent’s assistants obtained the pre-signed account forms, the Respondent knew or ought to have known that the account forms were pre-signed.

Sun Life’s Investigation

17. Sun Life’s compliance staff detected the conduct that is the subject of this Settlement Agreement during a branch audit on December 3, 2014 and subsequent follow-up investigation.

18. Sun Life identified the conduct involving the forms described above across 201 client files.

19. As part of its investigation, Sun Life sent letters to all clients serviced by the Respondent in order to determine whether the Respondent had engaged in any unauthorized trading. There is no evidence of any client concerns in response to these letters.

20. On June 3, 2015, Sun Life placed the Respondent under close supervision for a period of six months.

21. At Sun Life’s requirement, the Respondent also:
    1. successfully completed the Conduct and Practices Handbook course offered by the Canadian Securities Institute;
    2. transferred a substantial portion of his book of business to other Sun Life Advisors;
    3. transitioned to the role of Sales Associate Advisor (an Sales Associate Advisor works for, and under the supervision of, another Dealing Representative); and
    4. will resign from his position at Sun Life effective September 1, 2016. 

Additional Factors

22. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above beyond the commissions and fees that he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.

23. There is no evidence of client harm or lack of client authorization.

24. The Respondent has not previously been the subject of MFDA proceedings.

25. The Respondent cooperated with Sun Life’s investigation into his conduct.

26. The Respondent has expressed remorse for this conduct.

27. By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducting a full hearing on the allegations.

IV. ADDITIONAL TERMS OF SETTLEMENT

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

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.

[1] In 2002, Sun Life merged with Clarica Investco Inc. (“Clarica”). Clarica changed its name from Mutual Investco Inc. in 1999.