TORONTO, June 23 /CNW/ - The Mutual Fund Dealers Association of Canada
("MFDA") today announced that it has commenced disciplinary proceedings
against Domenic Fanelli and Michele Torchia (the "Respondents").
MFDA staff alleges in its Notice of Hearing that the Respondents engaged
in the following conduct contrary to the By-laws, Rules or Policies of the
Allegation No. 1: Between July 2002 and September 2003, Fanelli was
involved with outside business activity that was not disclosed to or
approved by the Member, Investors Group Financial Services Inc. ("IG"),
contrary to MFDA Rule 1.2.1(d)(iii).
Allegation No. 2: Between February 2003 and September 2003, Fanelli
engaged in securities related business that was not carried on for the
account of IG or through the facilities of IG by recommending and
facilitating the investment of client funds in a product unknown to and
unapproved by IG, outside the Member, contrary to MFDA Rule 1.1.1(a).
Allegation No. 3: Between February 2003 and September 2003, Fanelli sold
the securities of a publicly traded company to individuals, thereby
engaging in securities related business contrary to the terms of his
registration as a mutual fund salesperson under the Securities Act
(Ontario), R.S.O. 1990, c. S.5, as am. and MFDA Rule 2.1.1.
Allegation No. 4: Between August 2002 and September 2003, Fanelli engaged
in securities related business with clients of a Member, AXA Financial
Services Inc. ("AXA") while registered as a mutual fund salesperson with
another Member, IG, contrary to the terms of his registration as a mutual
fund salesperson under the Securities Act (Ontario), R.S.O. 1990, c. S.5,
as am. and MFDA Rules 2.1.1, 1.1.1 and 1.1.2.
Allegation No. 5: Commencing on or about September 13, 2006, Fanelli
failed to produce for inspection copies of bank statements requested by
MFDA Staff during the course of an investigation, contrary to section
22.1 of MFDA By-law No. 1.
Allegation No. 6: Between November 25, 2002 and February 9, 2005, Torchia
signed New Account Application Forms ("NAAFs") and processed trade
documentation as the Approved Person for clients that he had not
previously met nor received instructions from, thereby breaching his
"Know Your Client" obligations and the standard of conduct; and thereby
facilitating the processing of securities related business through the
Member, AXA by Fanelli when Fanelli was not registered with AXA, contrary
to MFDA Rules 2.1.1(c) and 2.2.1.
Allegation No. 7: Commencing on or about May 24, 2006, Torchia failed to
respond to a request from MFDA Staff to provide a written statement in
response to a complaint from his client, JM; and commencing on or about
April 17, 2007, Torchia failed to attend an interview to provide
information concerning his conduct as requested by MFDA Staff during the
course of its investigation, contrary to section 22.1 of MFDA By-law
The first appearance in this matter will take place by teleconference
before a Hearing Panel of the MFDA Central Regional Council in the Hearing
Room located at the offices of the MFDA, 121 King Street West, Suite 1000,
Toronto, Ontario on Tuesday, August 12, 2008 at 10:00 a.m. (Eastern) or as
soon thereafter as can be held.
The purpose of the first appearance is to schedule the date for the
commencement of the hearing on its merits and to address any other procedural
The first appearance is open to the public, except as may be required for
the protection of confidential matters. Members of the public attending the
first appearance will be able to listen to the proceeding by teleconference.
A copy of the Notice of Hearing is available on the MFDA website at
The Mutual Fund Dealers Association of Canada is the self-regulatory
organization for Canadian mutual fund dealers. The MFDA regulates the
operations, standards of practice and business conduct of its 159 Members and
their approximately 75,000 Approved Persons with a mandate to protect
investors and the public interest.
For further information:
For further information: Shaun Devlin, Vice-President, Enforcement,
(416) 943-4672 or firstname.lastname@example.org