Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association of Canada (“Staff”) and the Respondent, Sandra Rizovska-Spasik (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 August 6, 2020 and November 9, 2020, the Respondent cut and pasted client signatures from copies of account forms previously signed by clients onto 4 new account forms, and submitted 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 $13,000, 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, pursuant to s. 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 the MFDA in certified funds as follows:
      1. $8,000 (fine) upon acceptance of the Settlement Agreement by the Hearing Panel;
      2. $2,500 (costs) upon acceptance of the Settlement Agreement by the Hearing Panel;
      3. $1,000 (fine) on or before the last business day of the first month following the date of the Settlement Agreement;
      4. $2,000 (fine) on or before the last business day of the second month following the date of the Settlement Agreement;
      5. $2,000 (fine) on or before the last business day of the third month following the date of the Settlement Agreement;
   4. the Respondent shall in the future comply with MFDA Rule 2.1.1; and
   5. the Respondent will attend in person or by teleconference on the specified 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

7. In January 2011, the Respondent first became registered in the securities industry.
8. Between March 11, 2019 and January 2021, the Respondent was registered in Ontario as a dealing representative with Scotia Securities Inc. (the “Member”), a Member of the MFDA.
9. On January 19, 2021, the Member terminated the Respondent as a result of the conduct described herein, and she is not currently registered in the securities industry in any capacity.
10. At all material times, the Respondent conducted business in the Kitchener, Ontario area.

Cut and Pasted Client Signatures

11. Between August 6, 2020 and November 9, 2020, the Respondent cut and pasted client signatures from copies of account forms previously signed by three clients onto four new account forms, and submitted the account forms to the Member for processing.
12. The account forms consisted of four Investment Direction forms.

The Member’s Investigation

13. On or about December 1, 2020, the branch manager discovered the cut and pasted signatures on account forms described above. The Member completed a further review of client files maintained by the Respondent, and did not discover any additional instances of cutting and pasting client signatures.
14. On or about January 7, 2021, the Member conducted an interview with the Respondent, at which time the Respondent admitted to copying and pasting the clients’ signatures, and the Member suspended the Respondent that day.
15. On January 19, 2021, the Member terminated the Respondent.
16. As part of the Member’s investigation into the Respondent’s conduct, the Member contacted the affected clients and confirmed that the transactions were authorized and there were no concerns with the transactions in the client accounts.

Additional Factors

17. There is no evidence that the Respondent received any financial benefit from engaging in the misconduct described above beyond any commissions and fees that she would ordinarily be entitled to receive had the transactions been carried out in the proper manner.
18. There is no evidence of client loss or complaints, and the clients confirmed that the transactions were authorized and there were no concerns with the transactions.
19. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
20. 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.

ADDITIONAL TERMS OF SETTLEMENT

21. 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.
22. 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 www.mfda.ca.
23. 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.
24. 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. 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 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, 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 24.1.1 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.
25. 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 settlement negotiations.
26. 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.
27. 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.