A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has fined Carla-Marie Aksomitis, a former dealing representative with Royal Mutual Funds Inc. (Royal Mutual), $67,000 and banned her permanently from conducting securities-related business in any capacity while employed by or associated with an MFDA member firm for misappropriating approximately $119,000 from clients.
Aksomitis, who worked out of Musquodoboit Harbour, N.S. while employed with Toronto-based Royal Bank of Canada’s (RBC) mutual funds arm, must also pay costs of $7,500, according to the MFDA’s “decision and reasons” released on Thursday.
“Her behaviour in regard to these mutual fund investors is egregious. It was premeditated, planned and [included a] deliberate understanding that forgery was necessary to complete the theft, yet she acted accordingly to attain her aim,” the decision states. “Such a person has no place in the investment industry. Ms. Aksomitis has violated all the conduct rules of the MFDA.”
The decision is based on the findings surrounding two allegations from her employment with RBC, at which she was a dealing representative at a branch and also interacted with banking clients.
The first allegation involves the misappropriation of funds from two separate clients belonging to Royal Mutual Funds. Aksomitis admitted during the MFDA’s investigation in 2014 that she forged the signature of an 81-year-old client in February 2013 in order to process an unauthorized redemption of $359.57 from that client’s account. That amount was returned to the client’s account when the client questioned the transaction.
Aksomitis also admitted to forging the signature of a 76-year-old client in order to process three other unauthorized redemptions for a total of $19,000. These illegitimate transactions took place between February 2013 and May 2013. In this case, the money was used to pay her personal debts.
The second allegation surrounds the misappropriation of approximately $97,337 from the bank accounts of multiple RBC clients. As Aksomitis did not attend the hearing regarding these allegations that took place on Jan. 19, nor did she file a formal reply to the allegations, the MFDA hearing panel accepted the second allegation as fact.
The MFDA’s decision notes that RBC conducted its own investigation into Aksomitis’ conduct, which determined that she misappropriated a combined total of $101,000 from 27 clients. She agreed to pay back $100,000 in a settlement reached between herself and the bank.
The MFDA hearing panel accepted that Aksomitis misappropriated at least $100,000, based on the settlement Aksomitis agreed to pay, and that this is a higher amount than the MFDA’s original allegation.
The MFDA hearing panel’s decision also notes that it had difficulty deciding on Aksomitis’ penalty as the majority of the misappropriated funds came from clients of RBC, which is not a member of the MFDA. Although MFDA staff had suggested a fine of $175,000 to reflect the total amount of stolen funds, the hearing panel ultimately decided on an initial fine of $57,000, which is three times the amount that had been misappropriated and never returned to the 76-year-old client of Royal Mutual.
“To inflict a significant fine on activity outside of MFDA members may very well create jurisdictional problems, as well as open a precedent door that might not be in the MFDA best interests,” the MFDA hearing panel explains in its decision.
However, the MFDA hearing panel also decided that the situation warranted an additional fine because Aksomitis did not conduct herself appropriately as an approved person under the MFDA. The panel added $10,000 to reflect Aksomitis’ transgressions against RBC’s clients, leading to a total fine of $67,000.
Aksomitis was employed with Royal Mutual Funds and RBC between 2009 and July 2013, when she was terminated as a result of her actions, according to the decision.
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