Stephen Talosi is the latest approved person being sanctioned for participating in now-defunct, Wealthsimple Advisor Services Inc.’s onboarding process, where would-be Wealthsimple advisors – those from other firms interested in transferring their registration to Wealthsimple – would provide confidential client information to a company affiliated with the firm, in a bid to transfer those accounts along with their own registrations.
In this most recent case, Talosi sent information for approximately 1,126 clients with FundEX Investments Inc., to the Wealthsimple-affiliated firm, Wealthsimple Technologies Inc. (WSTI). Confidential information included a range of data, including social insurance numbers and investment amounts.
“The respondent did not ensure that clients consented to provide their client information to WSTI and did not inform FundEX that the client information was being sent,” Talosi’s settlement agreement with the Canadian Investment Regulatory Organization (CIRO) states.
In addition, Talosi is being sanctioned for helping a colleague at another mutual fund dealer firm to also provide client information to WSTI. The colleague, dubbed LH in the settlement agreement, reportedly experienced technical difficulties during their own onboarding bid with Wealthsimple.
“On or about April 1, 2019, LH provided the respondent with LH’s login credentials, including his username and password to (the) other member’s customer relationship management system so that the respondent could access the system and send client information to WSTI on behalf of LH,” they write. While logged into the other firm’s system, Talosi shared his screen remotely with Wealthsimple, generated three reports and saved these to his own computer before emailing them to WSTI on behalf of his colleague.
The regulator is also sanctioning Talosi for not cooperating with the FundEX investigation, as he reportedly told the firm that he never accessed the other firm’s systems.
Registered in the securities industry since 1987 and working with FundEX from 2006 until he was terminated in March 2020, the Welland, Ontario representative is not currently registered in the securities industry. In addition to a one-year ban from re-registration, Talosi must pay a fine of $40,000, costs in the amount of $5,000 and must complete remedial ethics coursework prior to becoming registered again in the future.
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