Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Shaun David Collier (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 Mutual Fund Dealers Association of Canada (“MFDA”):
   1. between March 2006 and February 2017, the Respondent obtained, possessed, and in some instances, used to process transactions, 12 pre-signed account forms in respect of 6 clients, contrary to MFDA Rule 2.1.1;
   2. between September 2009 and May 2011, the Respondent altered, and used to process transactions, 7 account forms in respect of 4 clients by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1; and
   3. on or about January 12, 2010, the Respondent cut and pasted 2 client signatures from copies of account forms previously signed by 2 clients onto new account forms, and submitted the account forms for processing, 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 acting as a branch manager or in a supervisory position while in the employ of or associated with any Member of the MFDA for a period of 12 months, pursuant to s. 24.1.1(f) of MFDA By-law No. 1;
   2. the Respondent shall successfully complete the branch manager course offered by either the Canadian Securities Institute or the Investment Funds Institute of Canada prior to acting as a branch manager in the future, pursuant to s. 24.1.1(f) of MFDA By-law No. 1;
   3. the Respondent shall pay a fine in the amount of $13,000 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 24.1.1(b) of MFDA By-law No.1;
   4. the Respondent shall pay costs in the amount of $2,500 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 24.2 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. The Respondent was registered in the mutual fund industry commencing in May 1997.
8. Between November 2000 and December 2018, the Respondent was registered as a mutual fund salesperson (now known as a Dealing Representative) in Ontario with Canfin Magellan Investments Inc. (“Canfin”), a Member of the MFDA.
9. From April 2006 to June 2017, Canfin designated the Respondent as a branch manager.
10. On December 17, 2018, the Respondent resigned from Canfin, and he is not currently registered in the securities industry in any capacity.
11. At all material times, the Respondent conducted business in the Ajax, Ontario area.

Pre-Signed Account Forms

12. Since at least 2008, Canfin’s policies and procedures prohibited its Approved Persons from using pre-signed account forms.
13. Between March 2006 and February 2017, the Respondent obtained, possessed, and in some instances, used to process transactions, 12 pre-signed account forms in respect of 6 clients.
14. The pre-signed account forms consisted of client application, plan application, and trade instruction forms.

Altered Account Forms

15. Between September 2009 and May 2011, the Respondent altered, and used to process transactions, 7 account forms in respect of 4 clients by altering information on the account forms without having the clients initial the alterations.
16. The altered account forms consisted of new plan application, new account application, and trade instruction forms.

Cut and Pasted Client Signatures

17. On or about January 12, 2010, the Respondent cut and pasted 2 client signatures from copies of account forms previously signed by 2 clients onto new account forms, and submitted the account forms for processing.
18. The clients confirmed in writing that they had instructed the Respondent to complete the new account forms using the clients’ signatures from forms previously signed by the clients.
19. The account forms with cut and pasted client signatures consisted of trade instruction forms.

Canfin’s Investigation

20. On June 12, 2017, Canfin identified the account forms that are the subject of this Settlement Agreement as a result of a routine branch audit. During this audit, Canfin conducted a review of all client files serviced by the Respondent.
21. As part of its investigation, Canfin either called or sent letters to all of the Respondent’s clients to determine whether the Respondent had engaged in any unauthorized trading. No clients reported any concerns.
22. On June 19, 2017, Canfin placed the Respondent under close supervision for a period of one year.

Additional Factors

23. There is no evidence that the Respondent received any benefit from the conduct set out above beyond the commissions or fees he would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
24. There is no evidence of client loss or lack of authorization for the underlying transactions.
25. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
26. 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

27. 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.
28. 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 mfda.ca.
29. 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.
30. 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.
31. 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.
32. 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.
33. 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.