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MFDA Reasons For Decision

Re:

Reasons For Decision

Reasons for Decision
File No. 201302-2


IN THE MATTER OF A SETTLEMENT HEARING
PURSUANT TO SECTION 24.4 OF BY-LAW NO. 1 OF
THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA


Re: Domenic Pizzimenti


Heard: November 20, 2013 in Toronto, Ontario
Reasons for Decision: December 17, 2013

REASONS FOR DECISION

Hearing Panel of the Central Regional Council:

Terrance A. Sweeney
Chair

Terrence Bourne
Industry Representative

Greg Juby
Industry Representative

Appearances:

Lyla Simon
)
For the Mutual Fund Dealers Association of

) Canada (“MFDA”)
)

Daniela
Capozzolo
) Investigator, MFDA
)

)

Domenic Pizzimenti
)
In person

)
Page 1 of 4


BACKGROUND

1.
The MFDA issued a Notice of Settlement Hearing dated September 16, 2013,1 in which it
set a date of November 20, 2013 to consider a settlement agreement dated August 23, 2013 (the
“Settlement Agreement) between the MFDA and Domenic Pizzimenti (the “Respondent”). The
proposed Settlement Agreement is dated September 3, 20132 and concerns allegations that the
Respondent, from June 20, 2009 to May 3, 2010, obtained and used four blank or partially
completed pre-signed forms to complete transactions for two clients, all of which was known to
and authorized by the clients, contrary to MFDA Rule 2.1.1.

2.
We were constituted as a Hearing Panel of the Central Regional Council of the MFDA to
consider the Settlement Agreement.

3.
At the commencement of the hearing, we ordered that the proceedings be moved in
camera. We then considered the Settlement Agreement and heard from Counsel as to the
principles to be applied in determining whether we should accept the Settlement Agreement and,
if so, what the appropriate penalty might be.

4.
We unanimously agreed that we should accept the Settlement Agreement and ordered
that the hearing continue in public session.

SUBMISSIONS

5.
The Respondent has been registered in Ontario as a mutual fund salesperson with the
same Member since 1987.

6.
The Respondent has no prior disciplinary record and did not benefit financially from his
misconduct. Moreover, there was no unauthorized trading, misappropriation, client harm or
complaint.

1 Exhibit 1
2 Exhibit 2
Page 2 of 4

7.
The Respondent admitted that, from June 20, 2009 to May 3, 2010, he obtained and used
four blank or partially completed pre-signed forms to complete transactions for two clients, all of
which was known to and authorized by the clients, contrary to MFDA Rule 2.1.1.

8.
Counsel referred to the relevant MFDA Rules and, in particular, to MFDA Member Staff
Notice 00663, which prohibits the use of pre-signed forms. The Notice reads, in part, as follows:

Even in cases where there is no evidence of intent to use a pre-signed form for the
purpose of discretionary trading, the use of such forms destroys the integrity of
the audit trail for activity in the relevant client’s account.

9.
She referred to four similar cases of previous hearing panels4 to provide guidance to the
Hearing Panel. She also directed our attention to the MFDA Penalty Guidelines with which we
are familiar.

DECISION AND REASONS

10.
The Hearing Panel has carefully considered the facts, law, Staff Notice 0066 and
Counsel’s submissions. We took special note of the Respondent’s cooperation with MFDA
which shows that he takes responsibility for his actions. We also relied on the other facts set out
in paragraph 6, above.

11.
Our decision seeks to punish the Respondent and deter him from similarly acting in the
future. More importantly, it is meant to deter others in the industry who might be tempted to
take “short cuts” which breach MFDA Rules.

12.
In all, we feel that the Settlement Agreement is reasonable and appropriate and in line
with previous hearing panel decisions. Accordingly, the Hearing Panel issues the following
Order:

3 Exhibit 3 dated October 31, 2007
4 Bestard (Re), 2011 LNCMFDA 78; Peer (Re), 2012 LNCMFDA 78; Mason (Re), 2012 LNCMFDA 34; Golden
(Re), 2013 LNCMFDA 26
Page 3 of 4

a) The Respondent shall pay a fine in the amount of $2,500, pursuant to s. 24.1.1(b) of
MFDA By-law No. 1;
b) The Respondent shall pay costs in the amount of $2,500, pursuant to s. 24.2 of
MFDA By-law No. 1;
c) The Respondent shall in future comply with Rule 2.1.1; and
d) If at any time a non-party to this proceeding requests production of, or access to, any
materials filed in, or the record of, this proceeding, including all exhibits and
transcripts, then the MFDA Corporate Secretary shall not provide copies of, or access
to, the requested documents to the non-party without first redacting from them any
and all intimate financial or personal information, pursuant to Rules 1.8(2) and (5) of
the MFDA Rules of Procedure.

13.
At the conclusion of the hearing, the Chair asked the Respondent why he would
jeopardize his livelihood by such foolish behaviour. He said “it was an error in judgment”. The
Chair sternly warned him against such behaviour in the future. He said that if he appeared before
another disciplinary panel of MFDA again he could be banned from the mutual fund industry.

DATED this 17th day of December, 2013.

“Terrance A. Sweeney”

Terrance A. Sweeney,
Chair

“Terrence Bourne”

Terrence Bourne,
Industry Representative

“Greg Juby”

Greg Juby,
Industry Representative

DM 363071 v1
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