The representative ordered to pay $30,000 after condo clients suffered losses from ineligible investments
A Canadian Investment Regulatory Organization (CIRO) hearing panel has accepted a settlement agreement with sanctions against Domenic James Cappola after he admitted to multiple compliance failures.
According to the settlement decision dated August 20, Cappola failed to learn the essential facts about his clients, condominium corporations, which under the Ontario Condominium Act could only invest in eligible securities and not mutual funds.
He also did not take steps to understand the structure, features, and risks of the mutual funds he recommended, and he failed to ensure those investments were suitable.
The panel found that between February and October 2022, the condominium corporations purchased more than $4.8m in mutual funds based on Cappola’s recommendations, which later resulted in $122,665.68 in losses.
Investors Group Financial Services Inc., where Cappola was a dealing representative, offered $168,406.96 in compensation to cover those losses and lost interest.
Cappola had received $112,935.52 in commissions from the sales, which were later reversed.
As part of the settlement, Cappola agreed to pay a $30,000 fine and $2,500 in costs. He also agreed to comply with CIRO’s Mutual Fund Dealer Rules in the future.
At the time of the conduct, Cappola conducted business in the Richmond Hill, Ontario area as a dealing representative. He remains registered with Investors Group Financial Services Inc.
