Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Dean Edward Owen (“Respondent”), consent and agree to settlement of this matter by way of this agreement (“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 June 2006 and October 2015, the Respondent obtained, possessed, and in some instances, used to process transactions, 164 pre-signed account forms in respect of 26 clients, contrary to MFDA Rule 2.1.1; and
   2. between February 2007 and August 2015, the Respondent altered and used to process transactions, 11 account forms in respect of 7 clients by altering information on the forms without having the clients initial the alterations, 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 be prohibited from conducting securities related business in any capacity while in the employ or associated with any Member of the MFDA for a period of 2 months from the date of the settlement hearing, pursuant to section 24.1.1(e) of MFDA By-law No. 1;
   2. the Respondent shall pay a fine in the amount of $20,000 pursuant to s. 24.1.1.(b) 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. From April 2006 to January 2016, the Respondent was registered in Saskatchewan and Alberta as a mutual fund salesperson (now known as a dealing representative) with Quadrus Investment Services Ltd. (“Quadrus”), a Member of the MFDA.

8. The Respondent is not currently registered in the securities industry in any capacity.

9. At all material times, the Respondent conducted business in the Saskatoon, Saskatchewan area.

Pre-Signed Account Forms

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

11. Between June 2006 and September 2015, the Respondent obtained, possessed, and in 136 instances, used to process transactions, 161 pre-signed account forms in respect of 26 clients.

12. The pre-signed account forms consisted of:
    1. 119 mutual fund switch / conversion forms;
    2. 12 subsequent investment forms;
    3. 24 redemption forms;
    4. 4 PAC, AWD, or RIF payment forms; and
    5. 2 RRSP direct transfer forms.

13. In September 2015, the Respondent’s branch manager identified some of the pre-signed account forms as described above. On or about October 1, 2015, Quadrus placed the Respondent on close supervision for a period of 12 months.

14. On or about October 21, 2015, while on close supervision, the Respondent obtained 3 additional pre-signed mutual fund switch/conversion forms, and submitted them to Quadrus for processing. The forms were detected by a Quadrus provincial compliance officer as a result of the Respondent being on close supervision at the time.

Altered Account Forms

15. At all material times, Quadrus’ policies and procedures prohibited its Approved Persons, including the Respondent, from obtaining, holding, or using altered account forms.

16. Between February 2007 and August 2015, the Respondent altered 11 account forms in respect of 7 clients by altering information on the account forms without having the clients initial the alterations. The Respondent states that in each instance the clients approved the alterations verbally with the Respondent prior to altering the information on the account forms.

17. The altered account forms consisted of:
    1. 10 mutual fund switch / conversion forms; and
    2. 1 redemption form.

Quadrus’ Investigation

18. In September 2015, the Respondent’s branch manager identified some of the pre-signed account forms as described in paragraphs 12 and 13, above. Quadrus’ compliance staff subsequently conducted a full review of the Respondent’s practice and identified the remaining pre-signed and altered account forms that are the subject of this Settlement Agreement.

19. On or about October 14, 2015, Quadrus sent letters to the all of the clients whose accounts were serviced by the Respondent in order to determine whether the transactions in the clients’ accounts were authorized. The clients did not report any concerns.

20. On or about November 19, 2015, Quadrus issued a warning letter to the Respondent for possessing and using pre-signed and altered account forms. In addition to placing the Respondent on close supervision, Quadrus required him to complete two online learning modules and review Quadrus’ policies and procedures by a specified date.

21. On or about January 11, 2016, Quadrus terminated the Respondent’s registration as a result of the Respondent’s failure to complete the online learning modules by the specified deadline, and for obtaining and using additional pre-signed forms while under close supervision, as described above in paragraph 14.

Additional Factors

22. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above beyond any 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 any client loss or that the transactions were unauthorized.

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

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

IV. ADDITIONAL TERMS OF SETTLEMENT

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.