Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and Garth Adrian Plunkett (the “Respondent”), 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 that:
   1. between May 13, 2011 and April 11, 2014, he altered and used to process transactions, 3 client account forms with respect to 3 clients, without having the clients initial the alterations, contrary to MFDA Rule 2.1.1; and
   2. between February 22, 2007 and June 27, 2013, he, or his assistant for whom he was responsible, obtained, possessed and used to process transactions, 33 pre-signed account forms in respect of 26 clients, 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 $11,250 upon acceptance of this Settlement Agreement, pursuant to section 24.1.1(b) of By-law No. 1;
   2. the Respondent shall pay costs in the amount of $2,500, pursuant to section 24.2 of By-law No. 1;
   3. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
   4. 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 August 21, 1997, the Respondent has been registered in Alberta as a mutual fund salesperson (now known as a dealing representative) with Desjardins Financial Security Investments Inc. (“Desjardins”), a Member of the MFDA.
8. At all material times, the Respondent conducted business in the Calgary, Alberta area.

Altered Account Forms

9. At all material times, Desjardins’ policies and procedures prohibited its Approved Persons from using altered account forms.
10. Between May 13, 2011 and April 11, 2014, the Respondent altered 3 letters of direction (“LOD”) in respect of 3 clients, by using correction fluid to alter information on the account forms and submitting them to the Member for processing, without having the clients initial the alterations.
11. The LOD were processed in accordance with client instructions.

Pre-Signed Account Forms

12. At all material times, Desjardins’ policies and procedures prohibited its Approved Persons from using pre-signed account forms.
13. Between February 22, 2007 and June 27, 2013, the Respondent or his assistant for whom he was responsible, obtained, possessed and used to process transactions, 33 pre-signed account forms in respect of 26 clients.
14. The pre-signed forms were comprised of:
    1. 24 LOD;
    2. 1 Know Your Client Update Form;
    3. 3 Transfer Forms; and
    4. 5 Trade Tickets.

Member Response

15. On June 24 and 25, 2015, Desjardins reviewed all of the client files maintained by the Respondent, and on October 9, 2015, Desjardins sent letters to all clients for whom pre-signed or altered forms were identified to determine whether the Respondent engaged in any unauthorized trading activity in the accounts of the clients. No clients responded to Desjardins.
16. On November 17, 2015, as a result of the conduct described above, Desjardins issued a warning letter to the Respondent, and placed the Respondent on close supervision for a period of 12 months.

Additional Factors

17. The Respondent has no prior disciplinary history with the MFDA.
18. There is no evidence of client harm in this matter.
19. There is no 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.
20. The Respondent has expressed remorse for his misconduct and has cooperated fully with Staff during the course of the investigation, and by agreeing to this settlement, has avoided the necessity of a full hearing on the merits.

 IV. ADDITIONAL TERMS OF SETTLEMENT

21.  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.
22. 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.
23. 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.
24. Staff and the Respondents agree that if this Settlement Agreement is accepted by the Hearing Panel:
    1.  a) the Settlement Agreement will constitute the entirety of the evidence to be submitted respecting the Respondent in this matter;
    2. b) 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. c) Staff will not initiate any proceeding under the By-laws of the MFDA against the Respondent in respect of the facts and 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. d) 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. e) 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.
25.  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.
26. 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. 
27. 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.