Finding of error in former SRO's ruling last year overturns one finding against advisor
The Capital Markets Tribunal has overturned part of a ruling by CIRO (then IIROC) against former rep and portfolio manager Mark Odorico.
Odorico was ruled to have misappropriated client money, conducted unauthorized trades, and failed to cooperate with IIROC staff at a hearing panel in March of 2022. He was given a permanent ban and fined $125,000 as well as $25,000 in costs and $579,000 in disgorgement.
Odorico subsequently asked the Capital Markets Tribunal to set aside the CIRO decision and find that the ban and financial penalties were “excessive and unfair in the circumstances.”
The tribunal found grounds to set aside one of the findings of misappropriated funds. They upheld most of IIROC’s ruling against Odorico.
In his appeal, Odorico argued that the money he received from two clients was a loan, and not an investment he was to make on their behalf. He submitted a number of promissory notes from his clients which supported his claim that the money received was a loan.
The IIROC hearing panel found that the clients thought their promissory notes were simply a record of the amounts invested with Odorico, citing their inexperience and level of education. However, the tribunal found that the panel overlooked one promissory note that sufficiently supported Odorico’s claim of a loan.
“We have concluded that the CIRO panel overlooked or misapprehended material evidence in this finding and expressed a supporting rationale for finding that Odorico’s evidence lacked credibility that was inconsistent with the overlooked or misapprehended material evidence.” The tribunal ruling reads. “In particular, we find that the CIRO panel overlooked or misapprehended material documentary evidence relevant to the fundamental question of whether the funds were advanced to Odorico as a personal loan.”
The tribunal has given CIRO 30 days to decide whether it will re-litigate that specific allegation.
If CIRO does not re-litigate, Odorico’s disgorgement financial penalty will be reduced by $150,000. That amount represents the money that may have been a loan.
