SETTLEMENT AGREEMENT

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File No. 201772

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: Luke Victor Bedard

SETTLEMENT AGREEMENT

I. INTRODUCTION

  1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Luke Victor Bedard (“Respondent”), consent and agree to settlement of this matter by way of this agreement (“Settlement Agreement”).
  1. 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

  1. Staff and the Respondent jointly recommend that the Hearing Panel accept the Settlement Agreement.
  1. The Respondent admits to the following violations of the By-laws, Rules or Policies of the MFDA:
    1. between January 2011 and May 2015, the Respondent falsified 65 client initials on account forms, in respect of 17 clients, and used the account forms to process transactions, contrary to MFDA Rule 2.1.1;
    2. between January 2011 and May 2015, the Respondent obtained, possessed and, in some instances, used to process transactions, 248 pre-signed account forms in respect of 47 clients, contrary to MFDA Rule 2.1.1; and
    3. on September 4, 2015, the Respondent misled the MFDA during the course of a branch examination by stating that he does not have clients sign account forms before the forms are fully complete when he knew or ought to known that this was false, contrary to MFDA Rule 2.1.1.
  1. Staff and the Respondent agree and consent to the following terms of settlement:
    1. the Respondent shall pay a fine in the amount of $7,500 pursuant to s. 24.1.1(b) of MFDA By-law No.1;
    2. the Respondent shall be suspended 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 3 years, contrary to s. 24.1.1(c) 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 by teleconference on the date set for the Settlement Hearing.
  1. 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

  1. Since 1992, the Respondent has been registered in Ontario as a mutual fund salesperson (now known as a Dealing Representative).
  1. Since 1992, the Respondent has been registered with Professional Investments (Kingston) Inc. (“PIKI”), a Member of the MFDA.
  1. At all material times, the Respondent conducted business in the Cornwall, Ontario area.
  1. The Respondent is 78 years old.

Falsified Client Initials

  1. Between January 2011 and May 2015, the Respondent falsified 65 client initials on Application for Change forms, in respect of 17 clients, and used the account forms to process transactions.
  1. The Respondent falsified the initials in order to represent the client’s acknowledgment that he or she had been advised of the fees or charges related to the transaction in question.

Pre-Signed Account Forms

  1. Between January 2011 and May 2015, the Respondent obtained, possessed and, in some instances, used to process transactions, 248 pre-signed Application For Change forms in respect of 47 clients.

Misleading the MFDA

  1. On September 4, 2015, MFDA Sales Compliance interviewed the Respondent prior to conducting an examination of his branch (the “Branch Review”). During the interview, MFDA Sales Compliance asked the Respondent about whether he used pre-signed account forms.
  1. In response to MFDA Sales Compliance’s question, the Respondent stated that he did not have clients sign account forms before the forms are fully complete, when he knew or ought to have known that this was false given the fact that at the time he gave this response, the Respondent had engaged in the conduct set out above at paragraphs 11-13.

PIKI’s Investigation

  1. On or about September 2015, PIKI’s compliance department became aware that during the course of the Branch Review, MFDA Sales Compliance had identified pre-signed account forms in the client files serviced by the Respondent.
  1. As part of its investigation into the findings identified by the Branch Review, PIKI reviewed all client files serviced by the Respondent and identified the remainder of the conduct that is the subject of this Settlement Agreement.
  1. PIKI placed the Respondent under close supervision and required that on an on-going basis, the Respondent send all original documents to PIKI’s head office for review.

Additional Factors

  1. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above other than the commissions or fees he would ordinarily be entitled to had the transactions been completed in the proper manner.
  1. There is no evidence of client loss or lack of authorization.
  1. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
  1. 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

  1. 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.
  1. 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.
  1. 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.
  1. 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 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;
    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.
  1. 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.
  1. 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.
  1. 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.

DATED: Jul 28, 2017

"GFG"

Witness – Signature


GFG

Witness – Print Name

“Luke Victor Bedard”

Luke Victor Bedard


 

“Shaun Devlin ”

Staff of the MFDA
Per: Shaun Devlin
Senior Vice-President,
Member Regulation – Enforcement


Schedule “A”

Order
File No. 201772

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: Luke Victor Bedard

ORDER

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 Luke Victor Bedard (“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:

  1. between January 2011 and May 2015, the Respondent falsified 65 client initials on account forms, in respect of 17 clients, and used the account forms to process transactions, contrary to MFDA Rule 2.1.1;
  2. between January 2011 and May 2015, the Respondent obtained, possessed and, in some instances, used to process transactions 248 pre-signed account forms in respect of 47 clients, contrary to MFDA Rule 2.1.1; and
  3. on September 4, 2015, the Respondent misled the MFDA during the course of a branch examination by stating that he does not have clients sign account forms before the forms are fully complete when he knew or ought to known that this was false, contrary to MFDA Rule 2.1.1;

IT IS HEREBY ORDERED THAT the Settlement Agreement is accepted, as a consequence of which:

  1. The Respondent shall pay a fine in the amount of $7,500 pursuant to s. 24.1.1(b) of MFDA By-law No. 1;
  1. The Respondent shall be suspended 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 3 years, contrary to s. 24.1.1(c) of MFDA By-law No. 1;
  1. The Respondent shall pay costs in the amount of $2,500 pursuant to s. 24.2 of MFDA By-law No. 1;
  1. The Respondent shall in the future comply with MFDA Rule 2.1.1; and
  1. If at any time a non-party to this proceeding, with the exception of the bodies set out in section 23 of MFDA By-law No. 1, requests production of or access to exhibits in this proceeding that contain personal information as defined by the MFDA Privacy Policy, then the MFDA Corporate Secretary shall not provide copies of or access to the requested exhibits to the non-party without first redacting from them any and all personal information, pursuant to Rules 1.8(2) and (5) of the MFDA Rules of Procedure.

DATED this [day] day of [month], 20[  ].

Per:      __________________________
[Name of Public Representative], Chair

Per:      _________________________
[Name of Industry Representative]

Per:      _________________________
[Name of Industry Representative]