Respondent fined $120,000 by MFDA after evidence reveals his remorse and shame at conduct
A former advisor has been fined $120,000 for misappropriating almost $200,000 from vulnerable clients, a large amount of which he admitted he gambled away.
Robert Eugene Palumbo also borrowed about $10,000 from another client, used 13 pre-signed account forms, and failed to cooperate with MFDA investigations into his conduct, according to a hearing panel.
Palumbo first became registered as a dealing representative in July 2010 and was also registered in Alberta from May, 2014. The violations occurred when he was working with IPC Investment Corporation in Sault Ste. Marie, Ontario. The member firm suspended him in June 16, 2017, pending an investigation into his conduct and, three days later, Palumbo resigned. He has not been registered in the securities industry in any capacity since then.
The three clients in question were 64, 78 and 84 years old. In an email to his business partner, Palumbo admitted to falsifying their names on signatures and depositing the money into his own bank account before gambling most of it away. Some of the money, he added, was used to pay corporate bills.
All the money – which totalled $195,626 - was paid back to the clients and, in a further email to his partner, Palumbo expressed remorse, explaining he was receiving treatment and counselling for his addiction problems.
He wrote: “I honestly am sorry for what I’ve done. I regret it. Am ashamed of it. Have given up my business and walked away from the industry permanently. This was a dark time in my life. Filled with gambling and abuse of alcohol. The clients have been fully reimbursed. My family has cleared the obligation of the money stolen and I am now working to pay them back with deductions off my biweekly pay checks.”
The $10,000 loan was from Palumbo’s cousin and the respondent said he repaid it within a year.
The MFDA said it took into account the fact the clients were repaid by Palumbo’s family and that he was working towards repaying that debt. It also considered personal family issues, that he was remorseful and that he was suffering from a gambling addiction and abuse of alcohol.
Palumbo must also pay costs of $7,500.
