TORONTO, Jan. 8, 2013 /CNW/ - A Settlement Hearing in the matter of Hugh
Blair Smilestone (the "Respondent") was held today in Halifax, Nova
Scotia before a Hearing Panel of the MFDA's Atlantic Regional Council.
The Hearing Panel accepted the Settlement Agreement between MFDA Staff
and the Respondent, as a consequence of which the Respondent has:
been prohibited from conducting securities related business for two
paid a fine of $10,000; and
paid costs of $5,000.
If, after the 2-year prohibition, the Respondent wishes to conduct
securities related business with an MFDA Member, the Respondent shall
(i) complete an ethics course acceptable to the MFDA; (ii) be subject
to 12 months of close supervision by the Member with whom he is
employed or associated; and (iii) comply with all MFDA By-laws, Rules
and Policies and all applicable securities legislation and regulations.
In the Settlement Agreement, the Respondent admitted that between June
1, 2004 and March 10, 2010, he falsified client signatures and initials
on account documents and falsified the content of certain other
documents in order to: (a) complete new client application forms; (b)
update Know-Your-Client and banking information; (c) implement changes
to pre-authorized contributions and systematic withdrawal plans; and
(d) execute trades in client accounts, contrary to MFDA Rules.
The Respondent also admitted that in November 2009 he falsely provided
signature guarantees on trade tickets processed for the account of
client MH after he had falsified the signature of client MH on the
trade tickets, contrary to MFDA Rules.
The Respondent also admitted that, contrary to MFDA Rules, between
January 2008 and March 10, 2010 he engaged in authorized and
unauthorized discretionary trading by determining one or more of the
following elements of trades that were executed in client accounts: (a)
the timing of the trade; (b) the amount of the trade; and (c) in some
cases the securities to be traded.
The Respondent further admitted that between January 2007 and March 10,
2010 he failed to comply with conditions imposed on him by the Member
with respect to the approval of his outside business activity, and that
on December 17 and 18, 2009 he provided false responses to the Member's
compliance staff during the course of a branch review, contrary to MFDA
The Hearing Panel advised that it will issue written reasons for its
decision in due course. A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca.
The MFDA is the self-regulatory organization for Canadian mutual fund
dealers, regulating the operations, standards of practice and business
conduct of its 116 Members and their approximately 80,000 Approved
Persons with a mandate to protect investors and the public interest.
SOURCE: Mutual Fund Dealers Association of Canada
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