Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Inocencia Bagongon Minierva (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 2015 and June 27, 2017, the Respondent altered 15 account forms in respect of 9 clients by altering information on the account forms without having the clients initial the alterations, contrary to MFDA Rule 2.1.1; and
   2. between April 29, 2014 and February 20, 2018, the Respondent obtained, possessed and in some instances used to process transactions, 13 pre-signed account forms in relation to 8 clients, contrary 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 $1,000 in certified funds pursuant to section 24.1.1(b) of By-law No. 1;
   2. the Respondent shall pay costs in the amount of $2,500 in certified pursuant to section 24.2 of By-law No. 1 upon acceptance of this Settlement Agreement;
   3. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
   4. the Respondent will attend in person at 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. Between April 29, 2014 and August 30, 2018, the Respondent was registered in British Columbia as a dealing representative with Sun Life Financial Services (Canada) Inc. (the “Member”), a Member of the MFDA.
8. On August 30, 2018, the Member terminated the Respondent’s registration and she is no longer in the securities industry in any capacity.
9. At all material times, the Respondent carried on business in the Maple Ridge, British Columbia area.

Altered Forms

10. Between March 2015 and June 27, 2017, the Respondent altered 15 account forms in respect of 9 clients by altering information on the account forms without having the clients initial the alterations.
11. The Respondent altered the account forms by handwriting changes without the client initialing the documents to show the alteration was approved.
12. The altered account forms included new account application forms, transfer authorization forms, Know-Your-Client (“KYC”) update forms, direction for payment to RESP forms and Education Savings Grant forms.
13. The alterations the Respondent made to the account forms included alterations to fund codes, KYC information, client information and withdrawal amounts.

Pre-Signed Forms

14. At all material times, the Member’s policies and procedures prohibited its Approved Persons from using pre-signed account forms.
15. Between April 29, 2014 and February 20, 2018, the Respondent obtained, possessed and in some instances used to process transactions, 13 pre-signed account forms in relation to 8 clients.
16. The pre-signed account forms included, new account application forms, KYC update forms, consents for electronic messages, transfer authorization form, pre-authorized chequing forms, and contact form and Canada Education Saving Grant forms.

Member Response

17. On June 4, 2018, the Member detected the pre-signed and altered forms that are the subject of this Settlement Agreement during a compliance review of all of the Respondent’s files.
18. On July 11, 2018, the Member placed the Respondent on strict supervision.
19. On August 30, 2018, the Member terminated the Respondent’s registration.
20. On October 16, 2018, the Member sent letters to all of the clients serviced by the Respondent enclosing the clients’ portfolio statements and asked them to review the transactions to confirm the transactions were authorized and to advise whether they had any concerns. No clients responded with any concerns to the Member.

Additional Factors

21. The Respondent has not been the subject of previous MFDA disciplinary proceedings.
22. There is no evidence of client loss in this matter or that the Respondent received any financial benefit from engaging in the misconduct beyond the commissions or fees to which she would have been ordinarily entitled had the transactions in the clients’ accounts been carried out in the proper manner.
23. There have been no client complaints in relation to the conduct described in this Settlement Agreement, and no evidence of unauthorized trading undertaken by the Respondent.
24. The Respondent has been diagnosed with a serious medical condition. Staff took the Respondent’s medical condition into account when agreeing to the penalty in this matter. The Respondent is currently not employed, and has provided Staff with evidence showing that she has limited financial means. The Respondent acknowledges that if it were not for her limited financial means it would have been appropriate for her to be subject to a monetary penalty that is greater than the fine and costs amounts set out in this Settlement Agreement.
25. The Respondent has cooperated fully with Staff during the course of the investigation, and by agreeing to this settlement, has avoided the necessity of a full hearing on the merits.

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. 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.
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.