THE RULES OF THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA STATEMENT OF ALLEGATIONS

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4 IN THE MATTER OF: THE RULES OF THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA AND GENNARO SCERBO STATEMENT OF ALLEGATIONS Further to a Notice of Hearing dated September 13, 2017, staff of the Investment Industry Regulatory Organization of Canada, make the following allegations: Count 1 PART I - CONTRAVENTIONS ALLEGED Between approximately June 2010 and September 2014, the Respondent forged his spouse s signature on account documents in order to misappropriate funds from her investment account, contrary to Dealer Member Rule 29.1; Count 2 In May 2017, the Respondent failed to cooperate with an IIROC investigation by failing to attend a compelled interview, contrary to section 8104 of the Consolidated Rules. Overview PART II - PARTICULARS 1. The Respondent, Gennaro (Gerry) Scerbo ( Scerbo ) was a Registered Representative ( RR ) with RBC Dominion Securities Inc. ( DS ) in Winnipeg. 2. Over approximately four years, Scerbo forged his spouse s signature on RRSP deregistration forms in order to misappropriate approximately $271,000 from her RRSP account.

5 3. In May 2017, Staff compelled the Respondent to attend an interview which he failed to attend. Registration History 4. Scerbo was an RR with DS in Winnipeg from January 2008 until December 2014, when his employment was terminated. 5. He is not currently employed with a Dealer Member. Forgery 6. At all material times, Scerbo and MS were married and resided together in Winnipeg. 7. In November 2008, MS opened an individual RRSP account with Scerbo. MS has limited investment knowledge and relied on Scerbo for investment advice and recommendations. 8. She transferred funds totaling $201, into the RRSP from another financial institution that she had saved over a number of years. In addition, from late November 2008 until 2014 she continued to make regular monthly contributions to her RRSP. 9. On or about December 2014, MS was contacted by a collections agency concerning an outstanding credit card debt. At that time, she was not aware of any family financial difficulties. 10. As a result, she undertook a review of her own and her family s financial affairs. This included obtaining copies of certain records from DS including her RRSP account statements. 11. To her surprise, the balance in her RRSP account was far less than she had expected. In particular, she did not know that there had been any withdrawals from the account. 12. In fact, between June 2010 and September 2014 (the Relevant Period ), 57 withdrawals totaling $271,000 were made from her RRSP without her knowledge or consent. 13. The funds were fraudulently withdrawn by Scerbo, who forged MS signature on RRSP de-registration withdrawal forms during the Relevant Period. These forgeries occurred on a regular basis, and allowed him to withdraw funds in monthly increments of approximately $5, In addition, Scerbo was responsible for receiving the monthly account statements in the mail, which he did not provide to MS. He was also responsible for filing income tax

6 returns on her behalf, which he did not do. Both these actions, together with the incremental withdrawals, furthered Scerbo s attempts to hide the withdrawals from MS. 15. The failure to file income tax returns, and the corresponding income tax owed due to RRSP de-registration, has resulted in significant income tax penalties and liability for MS. 16. MS trusted her husband to manage the family s financial affairs. She had no knowledge of the withdrawals. Scerbo s fraudulent actions constitute conduct unbecoming contrary to Dealer Member Rule Failure to Cooperate 17. By dated April 27, 2017, Staff advised Scerbo that the Enforcement Department of IIROC has opened an investigation into a complaint alleging forgery, falsification of client forms and unauthorized withdrawals from registered accounts. Staff further advised that it would like to schedule an interview with him. 18. Staff had previously left two previous voic s with Scerbo on April 24 and 26, 2017, requesting that he attend for an interview. 19. Scerbo did not respond to the voic s, or to the April 27 letter. 20. By registered letter dated May 10, 2017, Staff compelled Scerbo to attend an interview scheduled for Thursday, May 18, 2017 at 9:30 am in Winnipeg. The letter indicated that a failure to attend the interview would result in disciplinary action. The Registered letter was returned unclaimed. 21. By dated May 16, 2017, Staff sent an electronic copy of the registered letter to Scerbo. He did not acknowledge the , but Staff received a confirmation that the had been delivered. 22. On May 18, 2017, Scerbo failed to attend the compelled interview. As such, he has failed to cooperate with an IIROC investigation contrary to section 8104 of the IIROC Consolidated Enforcement, Examination and Approval Rules. DATED at Calgary, Alberta, this 13 th day of September, 2017