Settlement Agreement

I. INTRODUCTION

1. Staff of the Mutual Fund Dealers Association (“Staff”) and the Respondent, Gilbert VanAmburg (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 By-law No. 1.  

II. JOINT SETTLEMENT RECOMMENDATIONS

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 January 23, 2017 and December 14, 2020, the Respondent obtained, possessed and used to process transactions, 7 pre-signed account forms in respect of 9 clients, contrary to MFDA Rule 2.1.1; and
   2. between November 6, 2016 and January 6, 2021, the Respondent altered and used to process transactions, 16 account forms in respect of 14 clients, by altering information on 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 shall pay a fine in the amount of $17,500 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 in the future comply with MFDA Rule 2.1.1;
   4. the Respondent will attend in person or by videoconference, on the date set for the Settlement Hearing; and
   5. 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

6. Since February 1985, the Respondent has been registered in the securities industry.
7. Commencing on September 28, 2008, the Respondent has been registered in Nova Scotia as a dealing representative with Investia Financial Services Inc. (the “Member”), a Member of the MFDA.
8. At all material times, the Respondent conducted business in Halifax, Nova Scotia.

Pre-signed Account Forms

9. At all material times, the Member’s policies and procedures prohibited its dealing representatives from using pre-signed account forms.
10. Between January 23, 2017 and December 14, 2020, the Respondent obtained, possessed and used to process transactions, 7 pre-signed account forms in respect of 9 clients.
11. The pre-signed account forms include New Client Application Forms, and Know Your Client (“KYC”) Update Forms.

Altered Account forms

12. Between November 6, 2016 and January 6, 2021, the Respondent altered and used to process transactions, 16 account forms in respect of 14 clients, by altering information on the account forms without having the client initial the alterations.
13. The account forms that the Respondent altered include KYC Update forms, TFSA application forms, transfer authorization forms, order instruction forms, and transfer forms.
14. The information that the Respondent altered on the account forms included the fund names, investment amount, plan type, transaction details and relinquishing institution.

Member’s Investigation

15. In July 2021, the Member completed a full file review of the client files maintained by the Respondent and discovered the account forms that are described above.
16. Between July 28, 2021 and December 7, 2021, the Member placed the Respondent on strict supervision.
17. As part of its investigation into the Respondent’s conduct, the Member sent letters to all clients whose accounts the Respondent serviced. The letters provided the clients with three years of transaction history to determine that the trading activity was executed accurately and according to the clients’ instructions. Where the Respondent used altered or pre-signed forms containing KYC information, the clients were also provided with a copy of their KYC information to determine that it was accurate. No clients responded to the Member’s letters with any concern.
18. On December 7, 2021, the Member issued the Respondent a Warning Letter for his use of the account forms described above.

Additional Factors

19. 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 the proper manner.
20. There is no evidence of client loss, client complaints, or lack of authorization for the underlying transactions.
21. The Respondent has not previously been the subject of MFDA disciplinary proceedings.
22. By entering into this Settlement Agreement, the Respondent has saved the MFDA the time, resources and expenses associated with conducting a contested hearing on the allegations.

IV. ADDITIONAL TERMS OF SETTLEMENT

23. 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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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.
29. 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.