Settlement Agreement

    I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, David Juno McMillan (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 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 August 23, 2017 and November 4, 2019, the Respondent obtained, possessed and used to process transactions, 83 pre-signed account forms in respect of 57 clients, contrary to MFDA Rule 1.1;
   2. between October 13, 2017 and June 9, 2019, the Respondent altered and used to process transactions, 11 account forms in respect of 12 clients, by altering information on the account forms without having the client initial the alterations, contrary to MFDA Rule 2.1.1; and
   3. on or about October 1, 2018 and December 19, 2018, the Respondent re-used the signatures of 2 clients on 3 account forms by photocopying a signature from a previously signed form to complete a new transaction and submitting the account forms to the Member 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 pay a fine in the amount of $30,000 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 24.1.1(b) of MFDA By-law No.1;
   2. 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;
   3. the Respondent shall successfully complete the Ethics and Professional Conduct Course offered by the IFSE Institute, or an industry course acceptable to Staff of the MFDA, within 12 months of the acceptance of the Settlement Agreement, pursuant to section 24.1.1(f) of 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 or by videoconference 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. Since April 19, 1994, the Respondent has been registered in the securities
8. Since August 4, 2017, the Respondent has been registered in Ontario and British Columbia as a dealing representative with Investia Financial Services (the “Member”), a Member of the MFDA.[1]
9. At all material times, the Respondent conducted business in the Richmond Hill, Ontario area.

Pre-signed Account Forms

10. At all material times, the Member’s policies and procedures prohibited its Approved Persons from using pre-signed
11. Between August 23, 2017 and November 4, 2019, the Respondent obtained, possessed and used to process transactions, 83 pre-signed account forms in respect of 57
12. The pre-signed account forms included: Know Your Client update forms; New Client Application Forms; Order Instructions Forms; Systemic Withdrawal Instruction Forms; Tax Free Savings Account Application Forms; RESP Withdrawal Forms; Transfer Authorization Forms for Registered Investments; Systematic Instruction Forms; Transfer Authorization Forms for Non- Registered Investments; Deregistration/Withdrawal Request Forms for Registered or Investment Accounts; CI Open and Registered Plan Mutual Fund Application Forms; Systematic Purchase Instruction Forms; Summit Account Service Agreements and a CRA Direct Transfer of Single Amount (Pension Account)

Altered Account Forms

13. Between October 13, 2017 and June 9, 2019, the Respondent altered and used to process transactions, 11 account forms in respect of 12 clients, by altering information on the account forms without having the client initial the
14. The Respondent altered information on the account forms such as fund codes; investment objectives; risk tolerance; investment amounts; client net worth; client annual income; investment instructions; relinquishing institution information; client social insurance numbers and client date of birth

Respondent re-used client signatures

15. On or about October 1, 2018 and December 19, 2018, the Respondent re-used the signatures of 2 clients on 3 account forms by photocopying a signature from a previously signed form to complete a new transaction and submitted the account forms to the Member for
16. The forms with re-used and photocopied client signatures included Transfer Authorization for Registered Investments Forms and a CI Open and Registered Plan Mutual Fund Application Form.

The Member’s Investigation

17. On or about August 2, 2019, the Member conducted a full review of the client files maintained by the Respondent and discovered the account forms that are described above.
18. On or about October 24, 2019, the Member placed the Respondent on strict supervision for a period of 90 days.
19. On or about January 24, 2020, the Member sent letters to all clients for whom the Respondent obtained pre-signed forms or altered forms, along with 3-year transaction histories. The Member requested that the clients review their transaction histories to ensure that the trading activity was as the client had directed and to advise the Member of any inconsistencies in the information. The Member also requested that clients contact the Member if the client’s personal and financial circumstances changed in order to ensure the clients’ portfolios are in-line with the clients’ investment objectives and risk tolerance. No clients reported any concerns to the Member in response to its letters.
20. On February 12, 2020, the Member ended the period of strict supervision, and issued a Warning Letter to the
21. The Member required that the Respondent pay a $500 fee to the Member for the costs associated with being under strict
22. The Respondent was also required to sign a Letter of Undertaking to confirm that he had reviewed and would adhere to the Member’s Compliance Policies Procedures

Additional Factors

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

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
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
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 agrees to waive any 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;
    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.
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
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
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.

[1] On February 8, 2019, the Respondent also became registered as a dealing representative in the province of Quebec.