MFDA rules breach results in ban, $20,000 fine

MFDA rules breach results in ban, $20,000 fine

MFDA rules breach results in ban, $20,000 fine

A 76-year-old has been fined $20,000 for breaking MFDA rules by acting as an executor for a client.

Richard Giuliani was registered as a mutual fund salesperson with Quadras Investment Services Ltd from 2001 to 2015. In 2006, five months after the client died, he was named as the co-executor and co-trustee of the client’s estate, while between 2009 and 2011, Giuliani received a bequest of $85,000 from the estate in lieu of fees.

None of these activities were disclosed or approved by the MFDA, while Quadras was not informed.

The estate was, in part, to be divided equally among the client’s six grandchildren via trust accounts, which Giuliani set up in 2008 before proceeding to process approximately 72 trades and 15 switches in the trust accounts on about $500,000 of assets.

The respondent resigned as co-executor of the estate and ceased acting as trustee on April 23, 2010. In the December that year he was named as a defendant in a civil court claim brought by one of the client’s daughters and two granddaughters in the Ontario Superior Court of Justice. Failure to report this to the MFDA also breached industry rules.

The case was settled without costs or admission or finding of any liability of any party, including the respondent. As part of the settlement agreement, the respondent donated $23,375 of the $85,000 he had received to the Hamilton Community Foundation.

The MFDA learnt of events in 2015 and immediately asked Giuliani to resign. He has not worked in the mutual fund industry since. He maintains the misconduct was inadvertent and that did not intentionally breach MFDA rules, while an investigation did not reveal any evidence that any of the money was mishandled or that he benefited beyond the $85,000.

Giuliani was banned from conducting a securities related business in any capacity with an MFDA member for one year and was fined $20,000 and also ordered to pay $5,000 costs. The fine is to be paid through 12 monthly payments.

 

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