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: Suping Yan
- Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Suping Yan (“Respondent”), consent and agree to settlement of this matter by way of this agreement (“Settlement Agreement”).
- 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
- Staff and the Respondent jointly recommend that the Hearing Panel accept the Settlement Agreement.
- The Respondent admits to the following violations of the By-laws, Rules or Policies of the MFDA:
- between February and April 2016, the Respondent falsified 4 client signatures or client initials on 4 account forms, in respect of 4 clients, and used the account forms to process transactions, contrary to MFDA Rule 2.1.1.
- Staff and the Respondent agree and consent to the following terms of settlement:
- the Respondent shall be prohibited from conducting securities related business in any capacity while in the employ of or associated with a Member of the MFDA for a period of 9 months, pursuant to s. 24.1.1(e) of MFDA By-law No.1;
- the Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA By-law No.1;
- the Respondent shall in the future comply with MFDA Rule 2.1.1; and
- the Respondent will attend in person, on the date set for the Settlement Hearing.
- 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
- Between September 2014 and April 28, 2016, the Respondent was registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative) with CIBC Securities Inc. (“CIBC”), a Member of the MFDA.
- On April 28, 2016, as a result of the conduct that is the subject of this Settlement Agreement, CIBC terminated the Respondent. The Respondent is no longer registered in the securities industry in any capacity.
- At all material times, the Respondent conducted business in the Orleans, Ontario area.
Falsification of Client Signatures and Initials
- At all material times, clients JB, RJ, MR and ER were clients of CIBC whose accounts were serviced by the Respondent.
- Between February and April 2016, the Respondent submitted to CIBC four account forms for processing.
- CIBC identified deficiencies with these account forms and required that:
- in respect of clients JB and JR, the Respondent obtain a new signed account form; and
- in respect of clients MR and ER, the Respondent obtain the clients’ initials where missing from the forms.
- Rather than correcting the deficiencies in the manner that CIBC requested, the Respondent falsified the four account forms as follows:
- in respect of client JB, by cutting the client signature from an account form previously signed by the client and pasting it onto a new account form;
- in respect of client RJ’s, by re-using the signature page of an account form previously signed by the client to complete the transaction;
- in respect of client MR, by falsifying a set of client initials on an account form;
- in respect of client ER, by falsifying a set of client initials on an account form
- (collectively, the “Falsified Forms”).
- The Falsified Forms consisted of a Power of Attorney form, an investment plan, and two account application forms.
- On or around April 8, 2016, CIBC’s compliance department became aware of the Respondent’s conduct after it reviewed a physical copy of the client JB Falsified Form and identified that the client’s signature had been cut and pasted onto the form.
- As part of its investigation, CIBC conducted a review of the Respondent’s trading activities and identified the remainder of the conduct that is the subject of this Settlement Agreement. CIBC then contacted the affected clients to confirm they authorized the transactions.
- On April 28, 2016, as a result of the conduct that is the subject of this Settlement Agreement, CIBC terminated the Respondent.
- There is no evidence that the Respondent received any benefit from the conduct set out above beyond the commissions or fees she would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
- There is no evidence of client loss.
- The Respondent cooperated with CIBC during its investigation into her conduct.
- The Respondent has not previously been the subject of MFDA disciplinary proceedings.
- 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
- 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.
- 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. MFDA Settlement Hearings are typically held in the absence of the public pursuant to section 20.5 of MFDA By-law No. 1 and Rule 15.2(2) of the MFDA Rules of Procedure. If the Hearing Panel accepts the Settlement Agreement, then the proceeding will become open to the public and a copy of the decision of the Hearing Panel and the Settlement Agreement will be made available at www.mfda.ca.
- 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.
- Staff and the Respondent agree that if this Settlement Agreement is accepted by the Hearing Panel:
- the Settlement Agreement will constitute the entirety of the evidence to be submitted respecting the Respondent in this matter;
- 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;
- Staff will not initiate any proceeding under the By-laws of the MFDA against the Respondent in respect of the contraventions described in this Settlement Agreement. Nothing in this Settlement Agreement precludes Staff from investigating or initiating proceedings in respect of any 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;
- 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
- 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.
- 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.
- 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.
JAWitness - Signature
JAWitness - Print Name
Staff of the MFDA
Per: Shaun Devlin
Member Regulation – Enforcement
File No. 201770
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: Suping Yan
WHEREAS on [date], the Mutual Fund Dealers Association of Canada (“MFDA”) issued a Notice of Settlement Hearing pursuant to section 24.4 of By-law No. 1 in respect of Suping Yan (“Respondent”);
AND WHEREAS the Respondent entered into a settlement agreement with Staff of the MFDA, dated [date] (“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 between February and April 2016, the Respondent falsified 4 client signatures or client initials on account forms, in respect of 4 clients, and used the account forms to process transactions, contrary to MFDA Rule 2.1.1;
IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:
- The Respondent shall be prohibited from conducting securities related business in any capacity while in the employ of or associated with a Member of the MFDA for a period of 9 months, pursuant to s. 24.1.1(e) of MFDA By-law No. 1;
- The Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA By-law No. 1;
- The Respondent shall in the future comply with MFDA Rule 2.1.1; and
DATED this [day] day of [month], 20[ ].
[Name of Public Representative], Chair
[Name of Industry Representative]
[Name of Industry Representative]