MFDA Hearing Panel makes findings of misconduct and imposes sanctions against Zinan Liu

February 24, 2023 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”), now New Self-Regulatory Organization of Canada (“New SRO”), commenced a disciplinary proceeding in respect of Zinan Liu (the “Respondent”) by Notice of Hearing dated December 22, 2021 (“Notice of Hearing”).

A disciplinary hearing in this matter was held electronically by videoconference in Vancouver, British Columbia on January 23, 2023 before a three-member Hearing Panel of the New SRO’s Pacific District Hearing Committee. Prior to the hearing, the parties filed an agreed statement of facts dated December 8, 2022 (“Agreed Statement of Facts”), in which the Respondent admitted to facts constituting contraventions of MFDA By-laws, Rules or Policies, for which the Respondent could be penalized by a Hearing Panel pursuant to section 24.1 of MFDA By-law No. 1. In particular, the Respondent admitted that between May 2018 and February 2020, she:

1. engaged in personal financial dealings with clients by:

   1. borrowing $105,000 from a client;
   2. entering into a business arrangement with clients;

   which gave rise to conflicts or potential conflicts of interest that she failed to disclose to the Member or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to MFDA Rules 2.1.4 and 2.1.1;

2. engaged in unapproved outside activities, contrary to the Member’s policies and procedures and MFDA Rules 1.3, 2.1.1, and 1.1.2 (as it relates to Rule 2.5.1); and
3. completed an annual compliance questionnaire which stated that she had disclosed her outside business activities to the Member when she had not disclosed her outside activities to the Member, contrary to MFDA Rule 2.1.1.

Following submissions from the parties with respect to penalty, the Hearing Panel imposed the following sanctions on the Respondent and advised that it will issue written reasons in due course:

• a prohibition from conducting securities related business in any capacity while in the employ of, or in association with, any New SRO Member for a period of two years, commencing January 23, 2023;
• a fine in the amount of $15,000; and
• costs in the amount of $5,000.

Copies of the Notice of Hearing and the Agreed Statement of Facts are available on the MFDA website at www.mfda.ca. During the period described in the Agreed Statement of Facts, the Respondent carried on business in the Burnaby, British Columbia area.

New Self-Regulatory Organization of Canada is the national self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada’s debt and equity marketplaces. New SRO is carrying on the regulatory functions of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada, and is committed to the protection of investors, providing efficient and consistent regulation, and building Canadians’ trust in financial regulation and the people managing their investments. For more information, visit www.newselfregulatoryorganizationofcanada.ca.