Settlement Agreement

I. INTRODUCTION

1. The Mutual Fund Dealers Association of Canada (the “MFDA”) will announce that it proposes to hold a hearing (the “Settlement Hearing”) to consider whether, pursuant to section 24.4 of MFDA 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, Xinyi (Millie) Pu (the “Respondent”).
2. Staff and the Respondent consent and agree to the terms of this Settlement Agreement.
3. Staff and the Respondent jointly recommend that the Hearing Panel accept the Settlement Agreement.

II. CONTRAVENTIONS

4. The Respondent admits to the following violations of the By-laws, Rules or Policies of the MFDA:
   1. On February 20, 2020, the Respondent posted a portion of a client’s quarterly investment statement to a social media and messaging application without the client’s consent in order to promote her profile in the financial services industry, thereby failing to maintain in confidence all information received by the Member relating to a client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.3, 2.1.1, and 1.1.2 (as it relates to MFDA Rule 2.5.1).

III. TERMS OF SETTLEMENT

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 $5,000 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 6 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 Rules 2.1.3, 2.1.1, and 1.1.2 (as it relates to MFDA Rule 2.5.1); and
   5. the Respondent shall 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 this Settlement Agreement herein and consent to the making of an Order in the form attached as Schedule “A”.

IV. AGREED FACTS

Registration History

7. Between August 7, 2018 to April 16, 2021, the Respondent was registered in Ontario as a dealing representative with Investors Group Financial Services Inc. (the “Member”), a Member of the MFDA.
8. Since April 19, 2021, the Respondent has been registered in Ontario with Investors Group Securities Inc., a Dealer Member of the Investment Industry Regulatory Organization of Canada.
9. At all material times, the Respondent conducted business in the North York, Ontario area.

Disclosure of Confidential Client Information

10. At all material times, the Member’s policies and procedures prohibited Approved Persons from disclosing client information to anyone outside of the Member without the client’s written consent.
11. At all material times, client #1 was a client of the Member whose account was serviced by the Respondent. In February 2020, client #1 was a senior, and a vulnerable client due to age.
12. On February 20, 2020, without the consent of client #1, the Respondent posted a portion of client #1’s quarterly investment statement from the Member (the “Statement”) on a social media and messaging application called “WeChat”.
13. At the material time, the Respondent had approximately 850 contacts on WeChat that were able to view the post containing the Statement.
14. The Statement contained the following confidential personal information of client #1:
    1. client #1’s surname, and one of client #1’s given names;
    2. part of client #1’s address; and
    3. the account opening value, redemptions for the quarter, change in value, and current value for client #1’s account at the Member.
15. The Respondent states that she posted the Statement to WeChat as a marketing strategy to increase her client base.
16. By posting the Statement on a social media application to promote her financial services business without the prior written consent of client #1, the Respondent failed to maintain the information of a client in confidence.

Member’s Investigation

17. On February 24, 2020, an individual reported to the Member that the Respondent had posted the Statement as described above on WeChat.
18. The Member commenced an investigation into the Respondent’s conduct, during which the Respondent admitted to the conduct described above.
19. The Respondent states that she deleted the Statement from WeChat after being contacted by the Member during its investigation.
20. The Member contacted client #1 regarding the Respondent’s conduct described above, and offered to have another Approved Person assigned to client #1’s account. Client #1 requested that the account be reassigned to another Approved Person.
21. On April 9, 2020, the Member issued a Warning Letter to the Respondent for failing to maintain in confidence client information, as described above.

Additional Factors

22. There is no evidence of client financial loss resulting from the Respondent’s misconduct.
23. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
24. By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources, and expenses associated with conducting a contested hearing of the allegations.

  V. ADDITIONAL TERMS OF SETTLEMENT

25. 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.
26. The Settlement Agreement is subject to acceptance by the Hearing Panel. 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 www.mfda.ca.
27. 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.
28. 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 at the settlement hearing, subject to rule 15.3 of the MFDA Rules of Procedure;
    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. except for any proceedings commenced to address an alleged failure to comply with this Settlement Agreement, 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, 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;
    4. the Respondent shall be deemed to have been penalized by the Hearing Panel pursuant to section 24.1.2 of MFDA By-law No. 1 for the purpose of giving notice to the public thereof in accordance with section 24.5 of MFDA 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.
29. 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 this 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.
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 MFDA By-law No. 1, unaffected by the Settlement Agreement or the settlement negotiations.
31. 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. The terms of the Settlement Agreement, including the attached Schedule “A”, will be released to the public 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 or electronic copy of any signature shall be as effective as an original signature.