DISCIPLINARY COMMITTEE
CHAMBRE DE LA SÉCURITÉ FINANCIÈRE
CANADA
PROVINCE OF QUEBEC
No : CD00-1322
DATE : 11 février 2019
______________________________________________________________________
THE COMMITTEE : Me George R. Hendy President
Mr. Sylvain Jutras, A.V.C., Pl. Fin. Member
Mr. Bruno Therrien, Pl. Fin. Member
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MARC-AURÈLE RACICOT, in his capacity as assistant syndic of the Chambre de la sécurité financière
Plaintiff
v.
WEN BO CHEN (certificate 183173, BDNI 2485981)
Respondent
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DECISION REGARDING GUILT AND SANCTION
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IN ACCORDANCE WITH ARTICLE 142 OF THE PROFESSIONAL CODE, THE COMMITTEE RENDERS THE FOLLOWING ORDER:
Orders the non-disclosure, non-publication and non-release of the names of any clients who are contemplated or involved in the Complaint herein, as well as any information which might enable their identification.
[1] On January 14, 2019, the Disciplinary Committee of the Chambre de la sécurité financière (the “Committee”) met at the offices of the Tribunal administratif du travail, located at 500 René-Lévesque Boulevard West, 18th floor, in Montréal, for the hearing of a disciplinary complaint (the “complaint”) against the Respondent, which reads as follows:
THE COMPLAINT
1. « Dans la province de Québec, entre 2009 et le ou vers le 17 octobre 2016, l’intimée a contrefait ou a permis à un tiers de contrefaire la signature d’environ 8 personnes sur environ 7 formulaires, contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 11,16 et 35 du Code de déontologie de la Chambre de la sécurité financière (RLRQ, c. D-9.2, r.3);
2. Dans la province de Québec, le ou vers le 16 mai 2013, l’intimée a confectionné un faux « Electronic Insurance Application Declaration and Authorization » laissant croire à l’assureur que le client J.K. avait signé le formulaire en y ajoutant le lieu, la date et la signature, contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 16 et 35 du Code de déontologie de la Chambre de la sécurité financière (RLRQ, c. D-9.2, r.3);
3. Dans la province de Québec, entre 2009 et le ou vers le 17 octobre 2016, l’intimée a fait signer en blanc des documents à environ 5 clients, contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 11, 34 et 35 du Code de déontologie de la chambre de la sécurité financière (RLRQ, c. D-9.2, r.3);
4. Dans la province de Québec, entre 2009 et le ou vers le 17 octobre 2016, l’intimée a fait signer partiellement en blanc des documents à environ 11 clients, contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 11, 34 et 35 du Code de déontologie de la chambre de la sécurité financière (RLRQ, c. D-9.2, r.3);
5. Dans la province de Québec, entre 2010 et le ou vers le 17 octobre 2016, l’intimée a fait signer partiellement en blanc des documents à environ 2 clients, contrevenant ainsi aux articles 10 et 14 du Règlement sur la déontologie dans les disciplines de valeurs mobilières (RLRQ, c. D-9.2, r. 7.1);
6. Dans la province de Québec, le ou vers le 2 février 2010, l’intimée a signé, à titre de témoin, le formulaire « Application for Change to an Existing Life Insurance Policy » hors la présence de son client, J.C-Y., contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 11, 34 et 35 du Code de déontologie de la chambre de la sécurité financière (RLRQ, c. D-9.2, r.3);
7. Dans la province de Québec, le ou vers le 26 février 2012, l’intimée a signé, à titre de témoin, le formulaire « Credit Application – RRSP Loan » hors la présence de son client, W.C.L., contrevenant ainsi aux articles 10, 14 du Règlement sur la déontologie dans les disciplines de valeurs mobilières (RLRQ, c. D-9.2, r. 7.1);
8. Dans la province de Québec, le ou vers le 27 octobre 2015, l’intimée a déclaré à l’assureur que le client, C.K.F., a signé devant elle le formulaire « Identity Verification, Third Party Determination and Politically Exposed Foreign Persons (PEFP) Form (Life Insurance) » alors que le client signe le 3 novembre 2015, contrevenant ainsi aux articles 16 de la Loi sur la distribution de produits et services financiers (RLRQ, c. D-9.2), 11, 34 et 35 du Code de déontologie de la chambre de la sécurité financière (RLRQ, c. D-9.2, r.3).
[2] At the Respondent’s attorney’s request, the Committee drafted this decision in English, as Respondent speaks English, but not French. For ease of reading this decision, the Committee translated the complaint as follows:
“1. In the Province of Quebec, between 2009 and on or about October 17, 2016, the Respondent forged or permitted a third party to forge the signatures of approximately 8 persons on approximately 7 forms, thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and sections 11,16 and 35 of the Code of ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r.3);
2. In the Province of Quebec, on or about May 16, 2013, the Respondent prepared a false "Electronic Insurance Application Declaration and Authorization" form, so as to mislead the insurer to believe that the client J.K. had signed said form and inserted the place, date and signature, thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and sections 16 and 35 of the Code of ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r.3 );
3. In the Province of Quebec, between 2009 and or about October 17, 2016, the Respondent had approximately 5 clients sign documents in blank, thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and sections 11, 34 and 35 of the Code of ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r.3);
4. In the Province of Quebec, between 2009 and on or about October 17, 2016, the Respondent had approximately 11 clients sign documents partially in blank, thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2), and sections 11, 34 and 35 of the Code of ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r.3);
5. In the Province of Quebec, between 2010 and on or about October 17, 2016, the Respondent had approximately two clients sign partially blank documents, thereby contravening sections 10 and 14 of the Regulation respecting the rules of ethics in the securities sector (CQLR, c. D-9.2, r. 7.1);
6. In the Province of Quebec, on or about February 2, 2010, the Respondent signed, as witness, a form entitled " Application for Change to an Existing Life Insurance Policy", while not in the presence of her client, J.C.-Y., thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and sections 11, 34 and 35 of the Code of Ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r. 3);
7. In the Province of Quebec, on or about February 26, 2012, the Respondent signed, as witness, a form entitled "Credit Application - RRSP Loan", while not in the presence of her client, W.C.L., thereby contravening sections 10 and 14 of the Regulation respecting the Code of ethics in the securities sector (CQLR, c. D-9.2, r.7.1);
8. In the Province of Quebec, on or about October 27, 2015, the Respondent declared to an insurer that her client, C.K.F., had signed in her presence a form entitled "Identity Verification, Third Party Determination and Politically Exposed Foreign Persons (PEFP) Form (Life Insurance)", when in fact the client had signed on November 3, 2015, thereby contravening section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and sections 11, 34 and 35 of the Code of ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r.3).”
[3] The Plaintiff was represented at the hearing by Me Jean-Francois Noiseux, while the Respondent was represented by Me David Schwalb.
GUILTY PLEA
[4] The Respondent filed a guilty plea regarding the eight (8) counts of the Complaint and confirmed that she did so after consulting with her attorney and with full knowledge of the consequences. She expressed sincere contrition for her conduct, adding that she carried it out with the full knowledge and consent of her clients, in order to facilitate the transactions they had authorized.
[5] The Committee accepted Respondent's plea of guilt and declared her guilty of all eight (8) counts of the above Complaint. Considering the principle prohibiting multiple convictions for the same conduct, the Committee hereby declares Respondent guilty as follows, and will order a conditional stay of proceedings regarding the legal provisions cited in the Complaint, other than those cited below :
a) as regards counts 1, 2, 3, 4, 6 and 8, pursuant to section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2);
b) as regards counts 5 and 7, pursuant to section 10 of the Regulation respecting the rules of ethics in the securities sector (CQLR, c. D-9.2, r. 7.1).
[6] Following Respondent's guilty plea, the Plaintiff presented the documentary evidence reviewed below detailing the impugned conduct of the Respondent.
PLAINTIFF'S EVIDENCE
[7] Me Noiseux explained that Respondent's conduct first came to light after her employer, Sun Life, conducted an examination of her files and found that blank forms had been signed by some of her clients, which led to uncovering irregularities in eight (8) other client files. This led to the termination of Respondent's employment on October 17, 2016, which in turn provoked an investigation by the Chambre de la sécurité financière, and ultimately, the Complaint herein.
[8] Exhibit P-1, the "Attestation de droit de pratique" of the Respondent, shows that Respondent held the following certificates prior to her termination, subsequent to which she ceased to be registered as a representative with the AMF :
a) from June 9, 2009 to October 18, 2016, Respondent was authorized to deal in products related to the insurance of persons;
b) from January 13, 2010 until October 17, 2016, Respondent was authorized to deal with products related to "épargne collective" (mutual funds).
Count number 1
[9] In Exhibit P-2, we find examples of imitated (photocopied or "copy-pasted") signatures of clients at pages 000035, 000043, 000071, 000080, 000088, 000090 and 000114.
Count number 2
[10] In Exhibit P-3, it is obvious that, at page 000043 (also found in Exhibit P-2 above), the inscriptions regarding the place and date of signature of the document have been "copy-pasted".
Count number 3
[11] In Exhibit P-4, the evidence that Respondent had five (5) clients sign blank forms appears at pages 000057, 000100, 000121, 000123 and 000132.
Count number 4
[12] In Exhibit P-5, the evidence that Respondent had eleven (11) clients sign partially blank forms (e.g. the spaces for the date, City, Province and date of signature were left in blank when the clients signed) appears at pages 000085, 000124, 000170, 000346, 000354, 000378, 000383, 000390, 000391 and 000396.
Count number 5
[13] In Exhibit P-6, the evidence that Respondent had two (2) clients sign partially blank forms appears at pages 000350, 000352, 000362 and 000363.
Count number 6
[14] The copy of Exhibit P-7 found in Respondent's file contains her original signature (as witness to her client's signature) on a copied version of the form previously signed by the client, which means that Respondent falsely declared to the insurer that she "saw every person sign this form".
Count number 7
[15] Similarly, the original version of P-8 contains the original signature of Respondent at page 000183 (attesting to having been present when her client signed the form), while the rest of the form (including client's signature) is a photocopy, which constitutes another example of Respondent's false declaration to the insurer.
Count number 8
[16] In Exhibit P-9, Respondent certified on October 27, 2015 (at page 000202) that the information reflected in the document was given to her "face-to-face" by the client, while the corresponding declaration by the client (at page 000201) is dated November 3, 2015, one week later, clearly demonstrating another false declaration by the Respondent to the insurer.
RESPONDENT'S EVIDENCE
[17] Other than her above-mentioned statement at the start of the hearing, Respondent did not adduce any evidence and her attorney conceded that Me Noiseux' above-described presentation of the relevant facts was uncontested.
JOINT RECOMMENDATION REGARDING SENTENCE
[18] The parties' attorneys made the following joint recommendations regarding the sentence to be imposed in view of Respondent's guilty plea herein :
a) as regards counts 1 and 2, a temporary radiation of two (2) months;
b) as regards counts 3, 4 and 5, a temporary radiation of nine (9) months;
c) as regards counts 6, 7 and 8, a temporary radiation of two (2) months;
d) said temporary radiations to run concurrently, starting from the date of Respondent's reinscription (if applicable) with the AMF, with a condemnation to pay for the costs of publication pursuant to section 156 of the Professional Code.
[19] As regards the aggravating factors, Plaintiff invokes the objective gravity of Respondent's misconduct (forging client signatures, inciting clients to sign blank or partially blank forms and other documents and making false statements to insurers), the fact that the impugned conduct strikes at the core values of the profession, taints the public image of the profession, the lengthy period (2009 to 2015) during which the conduct persisted and the number of instances involved.
[20] As for the attenuating factors, Plaintiff refers to the fact that Respondent was not motivated by bad faith, albeit a misguided devotion to carrying out her clients' desires, that the clients suffered no prejudice from Respondent's conduct, that Respondent had no prior disciplinary record, and to her full cooperation with the investigation, her guilty plea and her genuine remorse, as well as the low risk of recidivism, given the fact that she no longer works in the industry.
[21] Plaintiff referred the Committee to the following precedents, which imposed sentences consistent with the joint recommendations in cases involving similar facts:
a) Chambre de la sécurité financière c. Prévost, 2017 QCCDCSF 52 (CD00-1145, September 28, 2017);
b) Chambre de la sécurité financière c. Merdjane, 2016 QCCDCSF 6 (CD00-1118, February 5, 2016);
c) Chambre de la sécurité financière c. Hannoush (CD00-1127, July 19, 2016);
d) Chambre de la sécurité financière c. Naimi, 2015 QCCDCSF 48 (CD00-1069, October 1, 2015).
ANALYSIS AND REASONS
[22] The Committee subscribes to the joint recommendations of the parties for the following reasons :
a) the conduct of the Respondent calls for the imposition of serious sanctions, given the nature of her conduct and the numerous instances thereof over a lengthy period of time;
b) however, the sanctions must be tempered by a recognition of the fact that Respondent acted without bad faith, in furtherance of her clients' instructions, who suffered no prejudice from her misconduct and the fact that Respondent has no prior disciplinary record, cooperated fully with the investigation, pleaded guilty, expressed sincere remorse for her misdeeds and is unlikely to repeat them;
c) the joint recommendations regarding the sanctions to impose upon Respondent appear to be consistent with the jurisprudence in similar cases.
[23] Considering the foregoing, and after reviewing the relevant facts and aforesaid aggravating and attenuating factors, the Committee is of the view that the sanctions described in paragraph 17 are just and appropriate, adapted to the infractions alleged in the Complaint herein, in conformity with the foregoing jurisprudential precedents and respectful of the principles of exemplarity and deterrence which must guide the Committee in the exercise of its discretion.
[24] As regards costs, as no reasons have been given which would justify an exception to the general rule, the Respondent will also be condemned to pay costs applicable pursuant to section 151 of the Professional Code.
FOR THESE REASONS, the Disciplinary Committee :
REITERATES the order of non-disclosure, non-publication and non-release of the names of the clients who are contemplated or involved in the Complaint herein, as well as any information which might enable their identification;
TAKES ACT of Respondent's guilty plea herein;
DECLARES Respondent guilty under Counts 1, 2, 3, 4, 6 and 8 of the Complaint pursuant to article 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and orders a conditional stay of proceedings regarding said counts as relates to articles 11, 16, 34 and 35 of the Code of Ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r. 3);
DECLARES the Respondent guilty under Counts 5 and 7 of the Complaint, pursuant to article 10 of the Regulation regarding the rules of ethics in the securities sector (CQLR, c. D-9.2, r. 7.1) and orders a conditional stay of proceedings regarding said counts as relates to article 14 of said Regulation;
CONDEMNS the Respondent to the following temporary radiations, which are to run concurrently, starting from the date on which Respondent is reinscribed to practice by the Autorité des marchés financiers or any other competent authority, at which date Respondent will also be obliged to pay the costs of the notices of radiation relating to this decision pursuant to article 156 of the Professional Code :
a) as regards Counts 1, 2, 6, 7 and 8, a temporary radiation of two (2) months;
b) as regards Counts 3, 4 and 5, a temporary radiation of nine (9)months;
ORDERS the Secretary of the Committee to publish, at Respondent's expense, a notice of the present decision in a newspaper circulating in the place where Respondent has her professional domicile or where she has exercised or may exercise her profession, in conformity with article 156 (5) of the Professional Code (CQLR, c. C-26), the whole at the date on which Respondent is reinscribed to practice by the Autorité des marchés financiers or any other competent authority;
CONDEMNS the Respondent to pay all costs, including the registration fees, pursuant to article 151 of the Professional Code (CQLR, c. C-26).
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(s) George R. Hendy_________________ Me George R. Hendy President of the Disciplinary Committee
(s) Sylvain Jutras____________________ Mr. Sylvain Jutras, A.V.C., Plan. Fin. Member of the Disciplinary Committee
(s) Bruno Therrien___________________ Mr. Bruno Therrien, Pl. Fin. Member of the Disciplinary Committee
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| Me Jean-François Noiseux |
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| CDNP Avocats |
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| Attorneys for the Plaintiff |
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| Me David Schwalb |
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| SCHWALB LÉGAL-LAW |
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| Attorney for the Respondent |
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| Date of hearing : |
January 14, 2019 |
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COPY IN ACCORDANCE WITH THE SIGNED ORIGINAL