Settlement Agreement

    I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Sageev Satchithanantham (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 February 2015 and April 2017, the Respondent photocopied signature pages from account forms that had been signed by clients and re-used the signature pages to complete 8 additional forms in respect of 6 clients, contrary to MFDA Rule 2.1.1;
   2. between June 2014 and May 2019, the Respondent obtained, possessed, and used to process transactions, 80 pre-signed account forms in respect of 47 clients, contrary to MFDA Rule 2.1.1; and
   3. between February 2015 and February 2018, the Respondent altered and used to process transactions, 18 account forms in respect of 13 clients, by altering the account forms without having the client 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’s authority to conduct securities related business while in the employ of or associated with a Member of the MFDA shall be suspended for a period of 1 month commencing on the third business day after the acceptance of this Settlement Agreement, pursuant to s. 24.1.1(c);
   2. the Respondent shall pay a fine in the amount of $20,000 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 24.1.1(b) of MFDA By-law No. 1;
   3. the Respondent shall pay costs in the amount of $5,000 in certified funds upon acceptance of the Settlement Agreement, pursuant to s. 24.2 of MFDA By-law No. 1;
   4. the Respondent shall complete an ethics or professional conduct course within 6 months of the acceptance of the Settlement Agreement, pursuant to s. 24.1.1(f) 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. Since June 2014, the Respondent has been registered in Ontario as a dealing representative with Sun Life Investment Services (Canada) Inc. (the “Member”), a Member of the MFDA.
8. At all material times, the Respondent conducted business in the Scarborough, Ontario area.
9. At all material times, the Respondent assisted Jessica Miller (“Miller”) and Edward Romaniuk (“Romaniuk”), two other Approved Persons registered with the Member to service client accounts of the Member. In most cases, Miller and Romaniuk were the primary Approved Persons responsible for servicing the client accounts that the Respondent assisted them to service. MFDA disciplinary proceedings have also been commenced against Miller (MFDA File No. 202153) and Romaniuk (MFDA File No. 202155).

Re-Used Account Forms

10. Between February 2015 and May 2019, the Respondent photocopied signature pages from account forms that had been signed by 6 clients and re-used the photocopied signature pages to facilitate the completion and processing of 8 additional forms in respect of those 6 clients.
11. The account forms to which photocopied signature pages were added consisted of: 5 Pre-Authorized Contribution (“PAC”)/Automatic Withdrawal (“AWD”) Forms, 1 Mutual Fund Application Form, 1 Transfer Authorization for Registered Investments and 1 Transfer Authorization for Non-Registered Investments.
12. The Respondent submitted 7 of the account forms to the Member for processing.

Pre-Signed Account Forms

13. At all material times, the Member’s policies and procedures prohibited the use of
    pre-signed forms.
14. Between June 2014 and May 2019, the Respondent obtained, possessed and used to process transactions, 80 pre-signed account forms in respect of 47 clients.
15. The pre-signed account forms consisted of: 33 PAC/AWD Forms, 13 Transfer Authorizations for Registered Investments, 12 Know-Your-Client (“KYC”) Update Forms, 7 Registered Education Savings Plan (“RESP”) Educational Assistance Payment Forms, 4 Mutual Fund Application Forms, 2 Order Tickets, 2 Transfer Authorizations for Non-Registered Investments, 1 Nominee Account Application Form, 1 Education Savings Plan New Account Application Form, 1 CI Open and Registered Plan Form, 1 CI Private Investment Management Account Application Form, 1 Limited Trading Authorization, 1 Private Client Service Fee Agreement, and 1 Identity Verification, Third Party Determination and Politically Exposed Foreign Persons Form.

Altered Account Forms

16. Beginning in May 2017, the Member’s policies and procedures required clients to initial or otherwise provide written authorization of any alterations to client documents after the document was signed by the client.
17. Between February 2015 and February 2018, the Respondent altered and used to process transactions, 18 account forms in respect of 13 clients by altering information on the account forms without having the clients initial the alterations.
18. The altered account forms included: 6 KYC Update Forms, 3 PAC/AWD Forms, 2 Limited Trading Authorizations, 2 Transfer Authorizations for Registered Investments, 2 CI Private Investment Management Application Forms, 1 Mutual Fund Application Form, 1 Order Ticket, and 1 Home Buyers Plan Request to Withdraw Funds.
19. The alterations made by the Respondent consist of changes to: client information, client investment objectives, client risk tolerance, client net worth, client investment knowledge, signature dates, PAC contribution amounts, fund codes and investment withdrawal dates.

The Member’s Investigation

20. On June 19 2019, MFDA Staff conducted a sales compliance review of a sample of the client files maintained at the Respondent’s branch that the Respondent had assisted Miller and Romaniuk to service and identified some of the deficient forms which are described above in this Settlement Agreement.
21. On June 24, 2019, the Member conducted a review of 100% of the client files maintained at the Respondent’s branch and identified the remaining deficient forms which are the subject of this Settlement Agreement.
22. On June 25, 2019, based upon the findings from the Member’s review of the client files, the Member placed the Respondent under close supervision which required compliance staff of the Member to audit all documents completed by or on behalf of clients which the Respondent had a role in servicing (but not necessarily prior to processing those documents).
23. On July 29, 2019, the Member placed the Respondent under enhanced supervision which required compliance staff of the Member to review account forms submitted by the Respondent prior to the processing of such account forms by the Member.
24. Commencing on or about August 9, 2019, the Member contacted all clients to determine whether the Respondent had engaged in any unauthorized activity in the accounts of clients and to confirm the accuracy of the KYC information on file for clients whose accounts were serviced in part by the Respondent. No clients expressed any concerns with respect to the handling of their accounts or the accuracy of their KYC information. 
25. On December 4, 2019, the Member issued the Respondent a warning letter in respect of his conduct.
26. On February 20, 2020, the Member discontinued its enhanced supervision of the Respondent and placed the Respondent under close supervision.
27. On February 22, 2021, the Member discontinued its close supervision of the Respondent.
28. The Member did not detect any additional misconduct during the period when the Respondent was subject to enhanced and close supervision.

Additional Factors

29. There is no evidence of client losses arising from the use of the forms described above and no clients have alleged that the transactions, directions or updates resulting from the processing of the forms were unauthorized.
30. 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 documents described in this Settlement Agreement been completed, signed or initialed in the proper manner.
31. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
32. 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

33. 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.
34. 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.
35. 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.
36. 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.
37. 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.
38. 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.
39. 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.