Securities Law & Instruments

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED AND IN THE MATTER OF AN APPLICATION FOR REGISTRATION BY VINCE DOMENICHINI

SETTLEMENT AGREEMENT

I. INTRODUCTION

1. This settlement agreement (the "Settlement Agreement") relates to an application (the "Application") for a reactivation of registration under the Securities Act (Ontario) (the "Act") by Vince Domenichini ("Domenichini") with Queensbury Strategies Inc. ("Queensbury").

2. In reviewing the Application, staff of the Ontario Securities Commission ("Staff") became aware of information regarding Domenichini's conduct as a registrant which could form the basis for a recommendation by Staff to the Director that the Application be refused pursuant to section 27 of the Act.

3. In the event that Staff recommended to the Director that the Application be refused, Domenichini would be entitled to an opportunity to be heard (an "OTBH") pursuant to section 31 of the Act in respect of Staff's recommendation.

4. In lieu of pursuing an OTBH, Staff and Domenichini have agreed to make a joint recommendation to the Director regarding the Application, as more particularly described in this Settlement Agreement.

II. AGREED STATEMENT OF FACTS

5. The parties agree to the facts as stated herein.

A. Domenichini's Registration History

6. Domenichini has been registered as a mutual fund dealing representative (and prior to September 28, 2009, a mutual fund salesperson) with the following registered firms:

(a) September 1994 -- October 2000: Queensbury; and

(b) December 2000 -- December 2014: Fundex Investments Inc. ("Fundex") (previously known as FundTrade Financial Corp.).

B. Compliance Audit by Fundex

7. During a normal course compliance audit of Domenichini's mutual fund practice in the fall of 2014, Fundex discovered documents in his file that contained client signature irregularities, and accordingly the firm undertook a more detailed investigation into the matter (the "2014 Compliance Audit").

8. Following the 2014 Compliance Audit, Domenichini admitted to Fundex that he had forged the signatures of some of his clients to documents used to process securities-related transactions.

C. Termination for Cause and Submission of Application

9. Fundex terminated Domenichini's employment for cause effective December 12, 2014 based on the findings of the 2014 Compliance Review. The termination of Domenichini's employment had the effect of suspending his registration under the Act.

10. On December 15, 2014, Domenichini submitted the Application, which was reviewed by Staff as described herein.

11. Pending the outcome of Staff's review of the Application, Domenichini has not worked in the securities industry since his employment with Fundex was terminated.

D. Review of Application

12. Staff reviewed the Application by consulting documents provided by Fundex, examining client files, and interviewing clients and Domenichini himself. This review found the following:

(a) During an October 2009 compliance audit (the "2009 Compliance Audit"), Fundex found and removed 5 pre-signed forms from Domenichini's files;

(b) As a result of the 2009 Compliance Audit, Domenichini signed a written undertaking to Fundex that he would not use pre-signed forms of any type in relation to transactions, or other activities involving client accounts;

(c) Domenichini used 30 pre-signed forms for 9 different clients subsequent to his undertaking to Fundex, as identified in Schedule "A";

(d) During the period 2007 to 2014, Domenichini forged client signatures to 51 documents for 17 different clients, as identified in Schedule "B";

(e) At least 5 of the forgeries were not authorized by the client;

(f) Domenichini usually did not attempt to have his clients sign a document before he resorted to forgery; and

(g) During the 2014 Compliance Audit, Domenichini falsely denied forging a document when questioned about it by Fundex.

III. ADMISSIONS AND REPRESENTATIONS BY DOMENICHINI

13. Domenichini admits that he obtained and used pre-signed forms and forged client documents as described in this Settlement Agreement for his own convenience.

14. Domenichini admits that by obtaining and using pre-signed forms and forging client documents he failed to deal fairly, honestly, and in good faith with his clients, contrary to OSC Rule 31-505 Conditions of Registration.

15. Domenichini represents as follows:

(a) his misconduct with respect to pre-signed forms and forgeries was not done to defraud his clients, but rather he believed that what he was doing was for their convenience;

(b) he takes full responsibility for his actions and regrets his misconduct;

(c) he has suffered financial and reputational harm as a result of his misconduct;

(d) if he is registered in the future, he will comply with all applicable provisions of Ontario securities law and the rules of any self-regulatory organization to which he may be subject, and will observe high standards of honest and responsible business conduct; and

(e) he recognizes and acknowledges that the further use of pre-signed forms or the forging of client documents could result in the permanent loss of his registration.

IV. JOINT RECOMMENDATION TO THE DIRECTOR

16. In order to resolve the matter of the Application, and on the basis of the Agreed Statement of Facts and the Admissions and Representations by Domenichini set out in this Settlement Agreement, Staff and Domenichini make the following joint recommendation to the Director:

(a) Domenichini will withdraw the Application and will not reapply for a minimum period of twelve months from December 15, 2014, the date the Application was initially submitted;

(b) before reapplying for registration, Domenichini will successfully complete the Conduct and Practices Handbook Course;

(c) if Domenichini complies with paragraphs 16(a) and (b) above, then upon Domenichini reapplying for registration in the future with a registered mutual fund dealer, Staff will not recommend to the Director that his application be refused unless Staff becomes aware after the date of this Settlement Agreement of conduct impugning Domenichini's suitability for registration or rendering his registration objectionable, and provided he meets all other applicable criteria for registration at the time he applies for registration; and

(d) in the event Domenichini's registration is reactivated his registration shall be subject to the terms and conditions set out in Schedule "C" for a period of at least one year.

17. The Parties submit that their joint recommendation is reasonable, having regard to the following factors:

(a) Domenichini has recognized and acknowledged his misconduct, and has provided assurances to Staff that he will conduct himself appropriately if he is registered again in the future;

(b) The joint recommendation requires Domenichini to obtain additional education about his professional responsibilities as a registrant;

(c) The period of time Domenichini is to be without registration under the Settlement Agreement is consistent with other relevant decisions of the Director;

(d) The terms and conditions proposed by the Settlement Agreement provide a means to detect or prevent future misconduct of a similar nature by Domenichini;

(e) Domenichini has suffered financial and reputational harm as a result of his misconduct;

(f) Domenichini has been co-operative with Staff in its review of the Application; and

(g) By agreeing to this Settlement Agreement, Domenichini has saved Staff and the Director the time and resources that would have been required for an OTBH.

18. Staff and Domenichini acknowledge that if the Director does not accept this joint recommendation:

(a) this joint recommendation and all discussions and negotiations between Staff and Domenichini in relation to this matter shall be without prejudice to the parties; and

(b) Domenichini will be entitled to an OTBH in accordance with section 31 of the Act in respect of any recommendation that may be made by Staff regarding his registration status.

19. The parties agree that this Settlement Agreement, and any Director's decision approving of it, will be published on the OSC's website and in the OSC Bulletin.

<<"Marrianne Bridge">>
<<"Vince Domenichini">>
Marrianne Bridge
Vince Domenichini
Deputy Director
Compliance and Registrant Regulation
 
<<October 16, 2015>>
<<October 10, 2015>>
Date
Date

 

Schedule "A"

Pre-Signed Forms

Name of Client

Description of Document

 

AL

B2B deregistration/withdrawal request, September 18, 2014

 

AL

B2B deregistration/withdrawal request, August 16, 2014

 

AL

B2B deregistration/withdrawal request, October 30, 2014

 

AL

B2B deregistration/withdrawal request, June 24, 2014

 

AL

B2B deregistration/withdrawal request, July 12, 2013

 

AL

B2B deregistration/withdrawal request, September 13, 2013

 

AL

B2B deregistration/withdrawal request, July 12, 2013

 

AL

B2B deregistration/withdrawal request, October 18, 2013

 

AL

B2B deregistration/withdrawal request, December 11, 2013

 

AL

B2B deregistration/withdrawal request, January 21, 2014

 

AL

B2B deregistration/withdrawal request, February 25, 2014

 

AL

B2B deregistration/withdrawal request, March 19, 2014

 

AL

B2B deregistration/withdrawal request, April 22, 2014

 

AL

B2B deregistration/withdrawal request, May 21, 2014

 

AL

B2B deregistration/withdrawal request, June 24, 2014

 

RO

CI Investments pre-authorized chequing agreement, July 29, 2013

 

RO

CI Investments pre-authorized chequing agreement, July 29, 2013

 

RO

TD Canada Trust new direct deposit/pre-authorized transactions, July 17, 2013

 

RO

TD Canada Trust new direct deposit/pre-authorized transactions, July 17, 2013

 

JV

MRS deregistration/withdrawal request, March 19, 2010

 

LV

MRS deregistration/withdrawal request, March 19, 2010

 

GT and IT

RESP educational assistance payment form, September 29, 2014

 

GT and IT

RESP educational assistance payment form, June 24, 2013

 

SN

B2B transfer form, July 11, 2013

 

SN

B2B transfer form, July 11, 2013

 

SN

B2B Transfer Form, typewritten date of 03/06/14, trade information dated July 9, 2014

 

PGHI

Order entry form, August 1, 2014

 

PGHI

Order entry form, July 24, 2014

 

TDHI

Order entry form, July 24, 2014

 

TDHI

Order entry form, August 8, 2014

 

Schedule "B"

Forgeries

Name of Client

Description of Document

 

AMC

Limited trading authorization, March 16, 2013

 

JC

B2B deregistration/withdrawal request, 02/09/2014

 

JC

B2B deregistration/withdrawal request, 30/07/2014

 

JC

B2B deregistration/withdrawal request, 06/08/2014

 

JC

B2B deregistration/withdrawal request, 06/02/2013

 

JC

B2B deregistration/withdrawal request, 04/12/2013

 

JC

B2B deregistration/withdrawal request, 03/22/2013

 

JC

B2B deregistration/withdrawal request, 02/22/2013

 

JC

B2B deregistration/withdrawal request, 01/18/2013

 

JC

B2B deregistration/withdrawal request, 09/01/2013

 

JC

B2B deregistration/withdrawal request, 17/08/2012

 

JC

B2B deregistration/withdrawal request, 22/08/2012

 

JC

B2B deregistration/withdrawal request, 17/09/2012

 

JC

B2B deregistration/withdrawal request, 22/09/2012

 

JC

B2B deregistration/withdrawal request, 16/11/2012

 

JC

B2B deregistration/withdrawal request, 15/12/2012

 

JC

B2B deregistration/withdrawal request, 24/10/2012

 

KM

New client application form, February 19, 2007

 

SP

Consent to E-mail Delivery of Documents, 05/09/2014

 

SP

B2B transfer form, 2014/02/13

 

SP

Limited trading authorization, February 19, 2013

 

SP

Limited trading authorization, April 17, 2012

 

SP

KYC update, 02/19/2013

 

SP

KYC update, 17/04/2012

 

UD

New client application form, May 5, 2010

 

UD

KYC update form, May 12, 2011

 

UD

KYC update form, November 11, 2013

 

DD

New client application form, March 16, 2013

 

DD

Dual occupation disclosure, March 16, 2013

 

DD

Letter of direction, October 10, 2007

 

DD

New client application form, August 5, 2008

 

DD

New client application form, May 12, 2011

 

MS

Limited trading authorization, March 30, 2013

 

MS

Dual occupation disclosure, March 30, 2013

 

MS

KYC update, March 30, 2013

 

MS

Limited trading authorization, February 12, 2008

 

SN

B2B deregistration/withdrawal request, June 4, 2014

 

SN

B2B deregistration/withdrawal request, April 10, 2014

 

SB

Limited trading authorization, January 23, 2013

 

MJ

KYC update, 01/04/2013

 

SG

KYC update, August 7, 2014

 

GG

KYC update, August 7, 2014

 

MS

Dual occupation disclosure, February 26, 2010

 

DS

KYC update, February 1, 2013

 

DS

Dual occupation disclosure, January 2, 2013

 

DS

Limited trading authorization, January 2, 2013

 

CS

New client application form, August 16, 2012

 

CS

Limited trading authorization, April 18, 2012

 

CS

KYC form, August 16, 2012

 

JR

Dual occupation disclosure, March 13, 2013

 

JR

New client application form, March 13, 2013

 

Schedule "C"

Terms and Conditions

The registration of Vince Domenichini (the "Registrant") under the Securities Act (Ontario) (the "Act") is subject to the following terms and conditions, which were imposed by the Director pursuant to section 27 of the Act:

Strict Supervision

1. For a period of at least twelve months from the date these terms and conditions are imposed:

(a) The registration of the Registrant shall be subject to strict supervision by his sponsoring firm.

(b) The Registrant's sponsoring firm is to submit written monthly supervision reports (in the form specified in Appendix A) to the Ontario Securities Commission (the "OSC"), Attention: Deputy Director, Registrant Conduct Team, Compliance and Registrant Regulation Branch, and also to the Mutual Fund Dealers Association ("MFDA"), Attention: Manager, Compliance. These reports will be submitted within 15 calendar days after the end of each month.

(c) The Registrant must immediately report to the OSC's Deputy Director, Registrant Conduct Team, Compliance and Registrant Regulation Branch if he is under investigation by the MFDA or is reprimanded in any way by the MFDA.

Delivery of Documents

2. For a period of at least twelve months from the date these terms and conditions are imposed:

(a) The Registrant may not process any transactions for a client without the client's written authorization, which must be delivered to the Registrant's sponsoring firm at the time the Registrant processes the transaction.

(b) If the Registrant processes a transaction for a client using a document that is signed or initialed by a client and that is not the original version of the document (a "Copied Document"), the Registrant must deliver the original document to his sponsoring firm within one week of the transaction to permit the firm to verify the authenticity of the Copied Document, including whether the Copied Document was created using a pre-signed form.

These terms and condition of registration constitute Ontario securities law, and a failure by the Registrant to comply with these terms and conditions may result in further regulatory action against him, including a suspension of his registration.

 

Appendix "A"

Strict Supervision Report

I hereby certify that supervision has been conducted for the month ending __________, 201_ of the trading activities of Vince Domenichini (the "Registrant") by the undersigned. I further certify the following:

1. All orders, both buy and sell, and sales contracts have been reviewed by a supervising officer of Queensbury Strategies Inc. prior to the trade occurring.

2. All client accounts have been reviewed for leveraging, suitability of investments, overconcentration of investments, excess trading or switching, and any amendments to know your client information.

3. A review of trading activity on a daily basis has been conducted of the dealing representative's client accounts.

4. No transactions have been made in any client account until the full and correct documentation is in place.

5. The Registrant has not been granted any power of attorney over any client accounts.

6. All payments for the purchase of the investments were made payable to the dealer or the mutual fund company. There were no cash payments accepted.

7. No client complaints have been received during the preceding month. If there have been complaints, an outline of the nature of the complaint and follow-up action initiated by the company is attached.{*}

8. There has been no handling of clients' funds or securities or issuance of cheques to clients without management approval.

9. Any transfer of funds or securities between clients' accounts has been authorized in writing and reviewed by the supervising officer.

10. Spot audits relative to the Registrant's client accounts have been conducted during the preceding month to ensure compliance with these procedures and no violations of these procedures were discovered.

______________________________

Date

______________________________

Signature of Supervising Officer

______________________________

Name of Supervising Officer

{*} In the event of client complaints or violations of securities legislation and/or the dealer's internal policies and procedures, the Ontario Securities Commission must be notified immediately.