Notice of Application
File No. 201234
IN THE MATTER OF AN APPLICATION
PURSUANT TO SECTION 24.3 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA
Re: PDQ Financial Services Inc.
NOTICE OF APPLICATION
(Section 24.3 of By-law No. 1)
NOTICE is hereby given that an application pursuant to section 24.3 of By-law No. 1 of the
Mutual Fund Dealers Association of Canada (the “MFDA”) will be brought by Staff of the
MFDA (“Staff”), with notice to the Member, PDQ Financial Services Inc. (“PDQ”), before a
hearing panel of the MFDA’s Central Regional Council (the “Hearing Panel”) in the MFDA
hearing room located at 121 King Street West, Suite 1000, Toronto, Ontario on August 30, 2012
at 10:00 a.m. or as soon thereafter as the hearing can be held.
DATED this 28th day of August, 2012.
“Jason D. Bennett”
Jason D. Bennett
Corporate Secretary
Mutual Fund Dealers Association of Canada
121 King Street West, Suite 1000
Toronto, Ontario
M5H 3T9
Telephone: 416-943-7431
Facsimile: 416-361-9781
Email: CorporateSecretary@mfda.ca
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THE APPLICATION IS FOR AN ORDER issued in accordance with s. 24.3.3(b) of MFDA
By-law No. 1, to impose the following terms and conditions on the authority of PDQ to conduct
securities related business:
1. PDQ shall appoint an individual satisfactory to the MFDA Compliance Department, other
than Cesidio Negri (“Mr. Negri”), to manage the financial affairs of PDQ who shall:
(a) be required to provide approval of any expense, payment or withdrawal made for
PDQ or taken from any of its bank accounts or investments before any expense is
incurred or any payment or withdrawal is made; and
(b) be responsible for all financial filings with the MFDA including PDQ’s monthly
filings of Form 1;
2. PDQ shall comply with all early warning requirements and restrictions set out in MFDA
Rules 3.4.2 and 3.4.3 that are imposed on PDQ by Staff from time to time, including
without limitation, the restrictions prohibiting PDQ from undertaking any of the
following activities without the prior written consent of Staff:
(a) making payments directly or indirectly by way of loan, advance, bonus, dividend,
repayment of capital or other distribution of assets to any director, officer, partner,
shareholder, related company, affiliate or associate of PDQ (regardless of whether
the recipient of the payment presently has or previously had any role in the
direction or control of PDQ);
(b) reducing the capital of PDQ in any manner including redemption, repurchase or
cancellation of any of its shares;
(c) reducing or repaying any indebtedness which has been subordinated with the
approval of Staff; or
(d) increasing non-allowable assets, unless a prior binding commitment to do so
exists, or entering into any new commitments which would have the effect of
materially increasing the non-allowable assets of PDQ;
3. Except with the prior written consent of Staff, PDQ shall not solicit or accept any further
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investment of money directly or indirectly in PDQ by any means including, without
limitation:
(a) the acquisition of shares or any other securities or other interest in the Member or
a party related to the Member including any right to convert or exchange a
currently held interest (for example an interest in a related party) into an equity
interest in the Member in the future; or
(b) the provision of a loan or any other kind of advance directly or indirectly for the
benefit of PDQ;
4. PDQ shall produce to MFDA Financial Compliance Staff any records within the
possession, power or control of shareholders or companies related to PDQ that bear on
the finances of PDQ or concern payments to or from PDQ;
5. PDQ shall respond to all requests for information directed to it by MFDA Financial
Compliance Staff within the time periods specified in the request;
6. PDQ shall preserve all books and records, including all hard copy and electronic records
in PDQ’s possession and control including, without limitation, any computer servers,
hard drives and other electronic records stored in any form (the “Records”) for a period
of 7 years, or for such other time period as a Hearing Panel may order, which records
shall be made available to Staff on demand within a reasonable timeframe; and
7. If it has not done so prior to the hearing of the application, PDQ shall, within 14 days of
the hearing of the application, provide Staff with a written plan explaining how PDQ will
immediately restore the minimum capital requirements applicable to it pursuant to
MFDA Rules and ensure that it maintains minimum capital on an on-going basis.
THE GROUNDS FOR THE APPLICATION ARE:
1. PDQ has frequently failed to maintain the minimum capital required pursuant to MFDA
Rule 3.1.1(a) and is presently capital deficient;
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2. PDQ has been designated in early warning pursuant to MFDA Rule 3.4.2(a) since
September 2, 2009 and has failed to rectify the circumstances causing it to be designated
in early warning;
3. PDQ has incurred financial losses of more than $40,000 in every calendar year since
2008 (except for 2009 when PDQ reported a profit of $16,208);
4. PDQ has frequently failed to comply with terms and conditions imposed on it after it was
designated in early warning by, for example, continuing to make payments to officers and
shareholders of PDQ (such as Mr. Negri who is a shareholder, a director, the Chief
Compliance Officer and Ultimate Designated Person of PDQ), while designated in early
warning without the prior written consent of the MFDA, contrary to MFDA Rule
3.4.2(b)(iv);
5. PDQ has failed to maintain adequate records reflecting its financial position and
performance by, for example, classifying expenses made for the personal benefit of Mr.
Negri, as corporate expenses;
6. Recently, PDQ has only been able to temporarily rectify capital deficiencies from time to
time by soliciting new investors to purchase shares in PDQ or lend or by other means
advance money to PDQ; and,
7. Sections 24.3.2(a)(iv), (viii), (xi), and 24.3.3(b) of MFDA By-law No. 1; and
8. Such further and other grounds as Staff may advise and the Hearing Panel may permit.
THE FOLLOWING EVIDENCE will be relied upon at the hearing of the application:
1. The Affidavit of Andy Ng sworn August 24, 2012;
2. The Affidavit of John Gallimore sworn August 24, 2012; and
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3. Such further and other evidence as Staff may submit and the Hearing Panel may permit.
Shelly Feld
Senior Enforcement Counsel
Mutual Fund Dealers Association of Canada
Direct Line: 416-943-7406
Email: sfeld@mfda.ca
Rohit Kumar
Enforcement Counsel
Mutual Fund Dealers Association of Canada
Direct Line: 416-945-5136
Email: rkumar@mfda.ca
STAFF OF THE MFDA
121 King Street West, Suite 1000
Toronto, Ontario
M5H 3T9
Fax: 416-361-9073
TO: PDQ Financial Services Inc.
C/O Cesidio Negri and Paul Stadnik
5000 Yonge Street, Suite 1901
Toronto, Ontario
M2N 7E9
Doc 307736
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