CIRO Hearing Panel accepts settlement agreement with Stephen Talosi

October 10, 2023 (Toronto, Ontario) – A settlement hearing in the matter of Stephen Joseph Talosi (the “Respondent”) was held electronically by videoconference on August 21, 2023 in Toronto, Ontario before a three-member Hearing Panel of the Ontario District Hearing Committee of the Canadian Investment Regulatory Organization (“CIRO”).

The Hearing Panel accepted the settlement agreement dated July 21, 2023 (the “Settlement Agreement”), between Staff of CIRO and the Respondent as a consequence of which the following sanctions were imposed on the Respondent:

• The Respondent is prohibited from conducting securities related business in any capacity while in the employ of or associated with any Dealer Member of CIRO registered as a mutual fund dealer for a period of 12 months commencing on the date of this Order pursuant to s. 24.1.1(e) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 7.4.1.1(e));
• a fine in the amount of $40,000 (“Fine”);
• costs in the amount of $5,000 (“Costs”);
• The Respondent shall successfully complete the Ethics and Professional Conduct Course offered by the IFSE Institute, or an ethics course acceptable to Staff of CIRO, prior to becoming re-registered as a dealing representative with a Dealer Member of CIRO registered as a mutual fund dealer, pursuant to s. 24.1.1(f) of MFDA By-law No. 1 (now Mutual Fund Dealer Rule 7.4.1.1(f)); and
• The Respondent shall in the future comply with Mutual Fund Dealer Rules 2.1.3, 2.1.1 and 1.1.2 (as it relates to Rule 2.5.1) (formerly MFDA Rules 2.1.3, 2.1.1 and 1.1.2 (as it relates to Rule 2.5.1)).

In the Settlement Agreement, the Respondent admitted that:

1. between about February 2019 and June 2019, the Respondent sent confidential client information to a third party without ensuring that the clients had provided prior consent, contrary to the Member’s policies and procedures and MFDA Rules 2.1.3, 2.1.1, and 1.1.2 (as it relates to Rule 2.5.1) (now Mutual Fund Dealer Rules 2.1.3, 2.1.1, and 1.1.2 (as it relates to Rule 2.5.1));
2. on or about April 1, 2019, the Respondent accessed the system of another MFDA Member using login credentials that were provided to him by an Approved Person registered with the other Member, and sent confidential client information from the system to a third party, without the other Member’s knowledge or consent, contrary to MFDA Rules 2.1.3 and 2.1.1 (now Mutual Fund Dealer Rules 2.1.3 and 2.1.1); and
3. on November 28, 2019, the Respondent misled the Member during its investigation into his conduct, contrary to MFDA Rule 2.1.1 (now Mutual Fund Dealer Rule 2.1.1).

A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca. During the period described in the Settlement Agreement, the Respondent carried on business in the Welland, Ontario area.

The Canadian Investment Regulatory Organization (CIRO) is the national self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada’s debt and equity marketplaces. CIRO is committed to the protection of investors, providing efficient and consistent regulation, and building Canadians’ trust in financial regulation and the people managing their investments. For more information, visit www.ciro.ca.

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