After partly upholding a rep’s appeal of a disciplinary decision against him last year, Ontario’s Capital Markets Tribunal has now also trimmed the sanctions that were imposed on him.
Last October, the tribunal tossed out one of the allegations against Mark Odorico, a former rep and portfolio manager with CIBC Wood Gundy Inc., who had been accused of unauthorized trading, misappropriating client money and failing to cooperate with regulators.
In 2022, a hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) found the allegations against him had been proven, and ordered a $125,000 fine, $579,000 in disgorgement, and $25,000 in costs against him, along with a permanent ban.
On appeal, the tribunal found the hearing panel had erred and set aside one allegation that he misappropriated client money.
On Thursday, the tribunal also reduced the sanctions imposed on Odorico, cutting the disgorgement order by $150,000 and reducing the fine by $10,000.
According to the tribunal’s decision, Odorico sought to have all sanctions imposed by the SRO panel reduced, including those not directly related to the allegation that was set aside. He also argued that the costs order should be reduced.
However, the tribunal declined to interfere with most of the sanctions, and didn’t overturn any of the other allegations against Odorico — namely that he also misappropriated $429,000 from another client, engaged in unauthorized trading in their account, and failed to cooperate with the SRO’s investigation.
The reduced disgorgement order reflects that the tribunal set aside the allegation that Odorico misappropriated $150,000 from a couple of clients.
The tribunal also reduced the fine imposed on him by the SRO for misappropriating client money from $50,000 to $40,000, but didn’t alter the other components of his fine and declined to convert his permanent ban into a temporary suspension, or to reduce the costs order.
“The separate fines imposed on Odorico for unauthorized trading ($25,000) and for the failure to co-operate with CIRO’s investigation ($50,000) were distinct from the finding of misappropriation and we see no reason to disturb them,” the tribunal said in its reasons.
“They were not unduly severe in the circumstances,” it said, adding it reduced the fine for misappropriation in proportion to the total amount that was misappropriated (from $579,000 to $429,000).
The tribunal also ruled that the permanent ban “should be upheld on the basis of the surviving contraventions” along with sanctions principles, SRO guidance, previous decisions and the facts of this case.
And, it declined to lower the costs order, noting that it already reflected a significant reduction from the actual costs incurred by the SRO, down to $25,000 from approximately $165,000.