Settlement Agreement

I. INTRODUCTION

1. By Notice of Settlement Hearing, the Mutual Fund Dealers Association of Canada (the “MFDA”) will announce that it proposes to hold a hearing to consider whether, pursuant to section 24.4 of By-law No. 1, a hearing panel of the Central Regional Council (the “Hearing Panel”) of the MFDA should accept the settlement agreement (the “Settlement Agreement”) entered into between Staff of the MFDA (“Staff”) and the Respondent, Mir Amer Raza (the “Respondent”).

II. JOINT SETTLEMENT RECOMMENDATION

2. Staff conducted an investigation of the Respondent’s activities. The investigation disclosed that the Respondent had engaged in activity for which the Respondent could be penalized on the exercise of the discretion of the Hearing Panel pursuant to section 24.1 of By-law No.1.
3. Staff and the Respondent recommend settlement of the matters disclosed by the investigation in accordance with the terms and conditions set out below. The Respondent agrees to the settlement on the basis of the facts set out in Part iv herein and consents to the making of an Order in the form attached as Schedule “A”.
4. Staff and the Respondent agree that the terms of this 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.

III. ACKNOWLEDGMENT

5. Staff and the Respondent agree with the facts set out in Part iv herein for the purposes of this Settlement Agreement only and further agree that this agreement of facts is without prejudice to the Respondent or Staff in any other proceeding of any kind including, but without limiting the generality of the foregoing, any proceedings brought by the MFDA (subject to Part ix) or any civil or other proceedings which may be brought by any other person or agency, whether or not this Settlement Agreement is accepted by the Hearing Panel.

IV. AGREED FACTS

Registration History

6. From June 24, 2011 to November 21, 2018, the Respondent was registered in Ontario as a dealing representative with CIBC Securities Inc. (the “Member”), a Member of the MFDA.
7. On November 21, 2018, the Member terminated the Respondent, in part, as a result of the conduct that is addressed in this Settlement Agreement.
8. At all material times, the Respondent conducted business in the Orangeville, Ontario area.

Personal Financial Dealing

9. At all material times, the Member’s policies and procedures prohibited Approved Persons from borrowing money from clients.
10. At all material times, client MA was a client of the Member whose investment accounts were serviced by the Respondent.
11. In or around April 2018, the Respondent states that he was experiencing financial difficulties.  At that time, client MA attended at the Respondent’s branch to discuss his mutual fund investments with the Respondent.  During their meeting, the Respondent told client MA about his financial difficulties.  To help the Respondent, client MA agreed to provide the Respondent with a $2,500 loan.
12. On April 20, 2018, in order to provide the Respondent with monies for the loan, client MA borrowed $2,500 from his personal line of credit and electronically transferred the monies to the Respondent. On the same date, the Respondent provided client MA with a cheque for $2,500, post-dated to June 14, 2018, as future repayment of the monies the Respondent borrowed from client MA.
13. The Respondent used the borrowed monies to pay personal expenses.
14. The Respondent did not disclose to the Member that he borrowed monies from client MA.
15. On or about June 14, 2018, client MA tried to deposit the $2,500 cheque from the Respondent, but it was returned by the bank due to insufficient funds.
16. The Respondent met with client MA, and provided him with a cheque for $1,100, dated June 26, 2018, and told client MA that he would repay the balance of the loan with cash.
17. When client MA tried to deposit the $1,100 cheque from the Respondent, it was returned by the bank due to insufficient funds.
18. Following the return of the second cheque, the Respondent made cash payments to client MA over the following months, and by late 2018, the Respondent had repaid the full amount of $2,500 to client MA.
19. The Respondent’s solicitation and acceptance of a loan from client MA contravened the Member’s policies and gave rise to a conflict of interest. The Respondent did not disclose the conflict of interest to the Member and otherwise ensure that the conflict was addressed by the exercise of responsible business judgment influenced only by the best interests of the client.

Additional Factors

20. 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.
21. The Respondent states that he has limited financial means and is unable to pay additional monies towards a fine or costs. As a result of his limited financial means, the Respondent is only able to pay the fine and costs agreed upon in this Settlement Agreement by way of instalments.  MFDA Staff have received evidence from the Respondent which corroborates the Respondent’s statement.
22. The Respondent has not previously been the subject of MFDA disciplinary proceedings.

V. CONTRAVENTIONS

23. The Respondent admits that between April 20, 2018 and December 31, 2018, the Respondent engaged in personal financial dealings with client MA by soliciting and accepting $2,500 from the client, which gave rise to a conflict of interest that he failed to disclose to the Member and address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1.

VI. TERMS OF SETTLEMENT

24. The Respondent agrees to the following terms of settlement:
    1. the Respondent shall pay a fine of $2,500 in certified funds, pursuant to section 24.1.1(b) of MFDA By-law No. 1;
    2. the Respondent shall pay costs of $2,500 in certified funds, pursuant to section 24.2 of MFDA By-law No. 1;
    3. the payment by the Respondent of the fine and costs shall be made to and received by Staff in certified funds as follows:
       1. $1,000 (costs) upon acceptance of the Settlement Agreement by the Hearing Panel;
       2. $400 (costs) on or before the last business day of the 1^st month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       3. $400 (costs) on or before the last business day of the 2^nd month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       4. $400 (costs) on or before the last business day of the 3^rd month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       5. $300 (costs) and $100 (fine) on or before the last business day of the 4^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       6. $400 (fine) on or before the last business day of the 5^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel; and
       7. $400 (fine) on or before the last business day of the 6^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       8. $400 (fine) on or before the last business day of the 7^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       9. $400 (fine) on or before the last business day of the 8^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel;
       10. $400 (fine) on or before the last business day of the 9^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel; and
       11. $400 (fine) on or before the last business day of the 10^th month following the date of the acceptance of the Settlement Agreement by the Hearing Panel; and
    4. the Respondent shall in the future comply with MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1; and
    5. the Respondent will attend in person or by teleconference, on the date set for the Settlement Hearing.

VII. STAFF COMMITMENT

25. If this Settlement Agreement is accepted by the Hearing Panel, Staff will not initiate any proceeding under the By-laws of the MFDA against the Respondent in respect of the contraventions described in Part v of this Settlement Agreement, subject to the provisions of Part ix Nothing in this Settlement Agreement precludes Staff from investigating or initiating proceedings in respect of any contraventions that are not set out in Part v of this Settlement Agreement or in respect of conduct that occurred outside the specified date ranges of the contraventions set out in Part v, whether known or unknown at the time of settlement.  Furthermore, nothing in this Settlement Agreement shall relieve the Respondent from fulfilling any continuing regulatory obligations.

VIII. PROCEDURE FOR APPROVAL OF SETTLEMENT

26. Acceptance of this Settlement Agreement shall be sought at a hearing of the Central Regional Council of the MFDA on a date agreed to by counsel for Staff and the Respondent. 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.
27. Staff and the Respondent may refer to any part, or all, of the Settlement Agreement at the Settlement Hearing. Staff and the Respondent also agree that if this Settlement Agreement is accepted by the Hearing Panel, it will constitute the entirety of the evidence to be submitted respecting the Respondent in this matter, and the Respondent agrees to waive his rights to a full hearing, a review hearing or appeal 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.
28. Staff and the Respondent agree that if this Settlement Agreement is accepted by the Hearing Panel, then the Respondent shall be deemed to have been penalized by the Hearing Panel pursuant to section 24.1.1 of By-law No. 1 for the purpose of giving notice to the public thereof in accordance with section 24.5 of By-law No. 1.
29. Staff and the Respondent agree that if this Settlement Agreement is accepted by the Hearing Panel, 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 him. 
30. If this Settlement Agreement is accepted by the Hearing Panel and, at any subsequent time, the Respondent fails to honour any of the Terms of Settlement set out herein, Staff reserves the right to bring proceedings under section 24.3 of the By-laws of the MFDA against the Respondent based on, but not limited to, the facts set out in Part iv of the Settlement Agreement, as well as the breach of the Settlement Agreement. If such additional enforcement action is taken, the Respondent agrees that the proceeding(s) may be heard and determined by a hearing panel comprised of all or some of the same members of the hearing panel that accepted the Settlement Agreement, if available.

IX. NON-ACCEPTANCE OF SETTLEMENT AGREEMENT

31. If, for any reason whatsoever, this Settlement Agreement is not accepted by the Hearing Panel or an Order in the form attached as Schedule “A” is not made 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 this Settlement Agreement or the settlement negotiations.
32. Whether or not this Settlement Agreement is accepted by the Hearing Panel, the Respondent agrees that he will not, in any proceeding, refer to or rely upon this Settlement Agreement or the negotiation or process of approval of this Settlement Agreement as the basis for any allegation against the MFDA of lack of jurisdiction, bias, appearance of bias, unfairness, or any other remedy or challenge that may otherwise be available.

X. DISCLOSURE OF AGREEMENT

33. The terms of this Settlement Agreement will be treated as confidential by the parties hereto until accepted by the Hearing Panel, and forever if, for any reason whatsoever, this Settlement Agreement is not accepted by the Hearing Panel, except with the written consent of both the Respondent and Staff or as may be required by law.
34. Any obligations of confidentiality shall terminate upon acceptance of this Settlement Agreement by the Hearing Panel.

XI. EXECUTION OF SETTLEMENT AGREEMENT

35. This Settlement Agreement may be signed in one or more counterparts which together shall constitute a binding agreement.
36. An electronic copy of any signature shall be effective as an original signature.