Regulator publishes reasons for banning advisor for two years

The Mutual Fund Dealers Association of Canada (MFDA) has banned former Scotia Securities Inc. dealing representative, Jason Martineau from conducting securities-related business in any capacity while in the employ of any MFDA member firm for two years and has fined Martineau $17,500 and costs totalling $2,500.

The sanctions come after Martineau admitted to forging a client’s signature on three forms, and admitted to altering or completing four additional forms without the client’s knowledge or authorization, before submitting all of the forms to Scotia for processing. He then failed to inform and misled his client about the circumstances, and made false or misleading statements to Scotia and to the MFDA during the course of their respective investigations into his conduct.

According to the MFDA’s reasons for decision, the Sudbury, Ontario representative, terminated in September 2018, had been registered in the industry since 2009.

When the client, identified only as HE in the decision documents, elected to transfer the total value of her pension plan, namely $16,227.57 to a Registered Retirement Savings Plan (RRSP) with Scotia, Martineau told HE that it would take approximately six to eight weeks for her pension monies to transfer. He then did not submit the transfer forms for processing for more than three months and did so only after HE inquired about the delay.

When he finally submitted the forms, late, without her knowledge, he told HE that “some kind of delay” was typical. “This happens sometimes in the financial world when transferring funds from one place to another. Companies do not like to let the money go,” he allegedly told his client.

When the transfer was rejected the next month, Martineau did not advise HE that the transfer had been rejected, instead choosing to complete a spousal and beneficiary designation form, signing HE’s signature on the form, and added information to another form, again signing HE’s signature before resubmitting the forms for processing.

When the transfer was again rejected – this time for attempting to transfer more than she was permitted under the Income Tax Act, Martineau again did not contact the client to inform her that she was not eligible to transfer the full value of her pension. In response to the rejection notice instead, Martineau altered or completed two more forms, electing to have a portion of the pension transferred to an RRSP with the balance, less applicable withholding taxes, being deposited into her bank account. Again, Martineau completed the request for direct deposit form without HE’s knowledge or authorization and signed her signature.

The client sent numerous emails to Martineau asking for an explanation for the five-month delay. “The respondent made misleading statements to client HE that he knew or ought to have known were not the cause of the delay, including blaming third parties such as HE’s former employer,” the MFDA states.

After HE complained to the firm, the rejection notices and attempts to imitate HE’s signature were found in Martineau’s office. But the representative denied falsifying the client’s signature, saying the client signed all of the transfer forms in question at their initial meeting more than seven months earlier, just in case the forms were needed.

According to the decision documents, the client in question alleged damages of only $200 – her own estimate of lost interest, for which she was reimbursed by Scotia.