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IIROC pursues DiCostanzo over undisclosed activity

2021-01-12 21:03 ET - Street Wire

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by Mike Caswell

The Investment Industry Regulatory Organization of Canada has begun proceedings against Neil DiCostanzo, a former Toronto employee of Foster & Associates Financial Services Inc., for failing to disclose money that he raised outside of his regular employment. IIROC says that Mr. DiCostanzo brought in $2-million for a cloud software company and $670,000 for a cannabis producer. Those he solicited included clients of Foster & Associates.

The allegations are contained in a notice of hearing that IIROC released on Monday, Jan. 11. The sole respondent is Mr. DiCostanzo, who worked at Foster & Associates for about two years before the firm learned of his outside activities. Upon making the discovery, Foster & Associates fired him (and he no longer works in a registered capacity).

The case centres around violations of what is known as Dealer Member Rule 18.14, which requires brokerage employees to notify their employers of all outside business activities. The rule does not specifically prevent employees from engaging in outside business (although it has provisions barring anything that would bring the industry into disrepute). Any outside business is subject to the policies of the individual brokerages, which must ensure that there are no conflicts of interest.

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