Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, John-Paul Tantalo (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 to the following violations of the By-laws, Rules or Policies of the MFDA:
   1. between September 9, 2009 and January 8, 2015, the Respondent obtained, possessed, and in some instances, used to process transactions, 14 pre-signed account forms in respect of 13 clients, contrary to MFDA Rule 2.1.1;
   2. between September 9, 2009 and January 8, 2015, the Respondent altered and in some instances, used to process transactions, 5 account forms in respect of 5 clients, by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1; and
   3. between 2009 and 2015, on 6 occasions, the Respondent failed to accurately respond to the Member’s annual compliance questionnaire by incorrectly affirming that he did not maintain any pre-signed account forms in client files, 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 $12,500 pursuant to s. 24.1.1(b) of MFDA By-law No.1 (the “Fine”);
   2. the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA By-law No.1 (“Costs”);
   3. the Respondent shall pay the Fine and Costs in certified funds as follows:
      1. $2,500 (Costs) upon entering into the Settlement Agreement;
      2. $1388.88 on the last business day of August 2017;
      3. $1388.88 on the last business day of September 2017;
      4. $1388.88 on the last business day of October 2017;
      5. $1388.88 on the last business day of November 2017;
      6. $1388.88 on the last business day of December 2017;
      7. $1388.88 on the last business day of January 2018;
      8. $1388.88 on the last business day of February 2018;
      9. $1388.88 on the last business day of March 2018; and
      10. $1388.88 on the last business day of April 2018.
   4. If the Respondent fails to make any of the payments described above in paragraph 5:
      1. any outstanding balance of the Fine and Costs owed by the Respondent shall become immediately due and payable to the MFDA; and
      2. the Respondent shall be immediately suspended from conducting securities related business while in the employ of or associated with a Member of the MFDA until such time as the total amount outstanding of Fine and Costs owed by the Respondent is paid to the MFDA, pursuant to s. 24.3.13(c) of MFDA By-law No.1.
   5. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
   6. 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 2002, the Respondent has been registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with Investors Group Financial Services Inc. (“Investors Group”), a Member of the MFDA. The Respondent has also been registered in Manitoba and New Brunswick since 2010 and 2013, respectively.

8. Between September 28, 2009 and April 1, 2011, Investors Group designated the Respondent as a branch manager.

9. At all material times, the Respondent conducted business in the Pickering, Ontario area.

Pre-Signed Account Forms

10. At all material times, Investors Group’s policies and procedures prohibited its Approved Persons, including the Respondent, from obtaining and using pre-signed account forms.

11. Between September 9, 2009 and January 8, 2015, the Respondent obtained, possessed, and in some instances, used to process transactions, 14 pre-signed account forms in respect of 13 clients.

12. The pre-signed account forms included pre-authorized contribution agreement forms, transfer authorization forms and new account application forms.

Altered Account Forms

13. Between September 9, 2009 and January 8, 2015, the Respondent altered and in some instances, used to process transactions, 5 account forms in respect of 5 clients, by altering information on the account forms without having the clients initial the alterations.

14. The altered account forms consisted of new account application forms and pre-authorized contribution agreement forms.

Failing to Accurately Respond to Member Compliance Questionnaire

15. Between 2009 and 2015, the Respondent failed to accurately respond the Member’s annual compliance questionnaire by incorrectly affirming that he did not maintain any pre-signed account forms in client files.

Investors Group’s Investigation

16. In January 2015, Investors Group’s compliance department identified pre-signed account forms in the client files serviced by the Respondent during a routine branch review. During the course of its investigation, Investors Group identified further deficient account forms. Together, the account forms are the subject of this Settlement Agreement.

17. As part of its investigation, Investors Group reviewed all of the client files serviced by the Respondent.

18. On October 28, 2015, Investors Group issued a warning letter to the Respondent.

Additional Factors

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

20. There is no evidence of client loss or lack of authorization.

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

22. 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

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 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.