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MFDA Order

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HomeCompleted Hearings201942 - Lachman Hassaram Balani › Order201942

File No. 201942

IN THE MATTER OF A DISCIPLINARY HEARING PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Lachman Hassaram Balani

Order

(ARISING FROM HEARING ON THE MERITS ON DECEMBER 10, 2019)

WHEREAS on June 19, 2019, the Mutual Fund Dealers Association of Canada (the “MFDA”) issued a Notice of Hearing pursuant to sections 20 and 24 of By-law No. 1 in respect of a disciplinary proceeding commenced against Lachman Hassaram Balani (the “Respondent”);

AND WHEREAS the Respondent was personally served with the Notice of Hearing, as appears from the affidavit of service of Abhishek Anand sworn August 19, 2019;

AND WHEREAS in accordance with s. 19.13 of MFDA By-law No. 1, on September 10, 2019, the first appearance in this matter was held by teleconference before a public representative of the Central Regional Council of the MFDA (“Hearing Panel”) to schedule a hearing on the merits (the “first appearance”);

AND WHEREAS the Respondent did not attend or otherwise participate at the first appearance;

AND WHEREAS during the first appearance Staff of the MFDA (“Staff”) made submissions with respect to scheduling and other procedural matters;

AND WHEREAS at the first appearance, the hearing of this matter on its merits was scheduled to take place before the Hearing Panel on November 23, 2019;

AND WHEREAS the Respondent was made aware of the scheduled date for the hearing on the merit, as appears from the affidavit of service of Tarun Rajput, sworn September 19, 2019;

AND WHEREAS the Respondent refused to accept correspondence from MFDA Staff on and after September 27, 2019, as appears from the affidavit of service of Terri Ash, sworn October 3, 2019;

AND WHEREAS on November 23, 2019 the hearing on the merits of this matter was adjourned to December 10, 2019;

AND WHEREAS the hearing on the merits was held before the Hearing Panel on December 10, 2019;

AND WHEREAS the Respondent did not attend or otherwise participate at the hearing on the merits;

AND WHEREAS during the hearing on the merits the Hearing Panel considered the evidence filed by Staff and the submissions made by Staff;

AND WHEREAS no one appeared at the hearing on the merits on behalf of the Respondent;

AND WHEREAS the Hearing Panel considered the evidence filed by, and the submissions of, Staff of the MFDA;

AND WHEREAS the Hearing Panel is of the opinion, and has decided that (the “Decision”):

  1. commencing February 13, 2017, the Respondent failed to cooperate with an investigation by MFDA Staff into his conduct, contrary to section 22.1 of MFDA By-Law No. 1;
  2. between October 2010 and November 20, 2016, the Respondent prepared and submitted new account application forms and investment loan applications for at least two clients which the Respondent knew or ought to have known contained false, misleading or incorrect information, thereby failing to observe the high standards of ethics and conduct in the transaction of business and engaging in conduct unbecoming an Approved person, contrary to MFDA Rule 2.1.1;
  3. between October 2010 and November 20, 2016, the Respondent misrepresented, failed to fully and adequately explain, or omitted to explain, the risks, benefits, material assumptions, features and costs of a leveraged investment strategy that he recommended to at least two clients, thereby failing to ensure that the leveraged investment recommendations were suitable for the clients and in keeping with the clients’ investment objectives, contrary to MFDA Rules 2.2.1 and 2.1.1 and MFDA Policy No. 2; and
  4. between October 2010 and November 20, 2016, the Respondent failed to ensure that the leveraged investment recommendations he made to at least two clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant “Know Your Client” information and personal and financial circumstances, including but not limited to the clients’ ability to afford the costs associated with the investment loans and withstand investment losses, contrary to MFDA Rules 2.2.1 and 2.1.1 and MFDA Policy No. 2.

IT IS HEREBY ORDERED THAT:

  1. If at any time a non-party to this proceeding requests production of, or access to, any materials filed in, or the record of, this proceeding, including all exhibits and transcripts, then the MFDA Corporate Secretary shall not provide copies of, or access to, the requested documents to the non-party without first redacting from them any and all intimate financial or personal information, pursuant to Rules 1.8(2) and (5) of the MFDA Rules of Procedure; and
  2. The parties will be permitted to make submissions with respect to the appropriate penalties to be imposed against the Respondent, if any, during a penalty hearing the date of which is to be scheduled by the parties at a later date, after the Hearing Panel issues and releases its Decision.

DATED: Dec 10, 2019

"W. A. Derry Millar"

W. A. Derry Millar

Chair


"Patrick Galarneau"

Patrick Galarneau

Industry Representative


"Rob Christianson"

Rob Christianson

Industry Representative


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