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MFDA Hearing Panel issues Decision and Reasons in the matter of Mahmoud Rihawi et, al.

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Charles Toth
Vice President, Enforcement

MFDA Hearing Panel issues Decision and Reasons in the matter of Mahmoud Rihawi et, al.

November 29, 2018 (Toronto, Ontario) – A Hearing Panel of the Central Regional Council of the Mutual Fund Dealers Association of Canada (“MFDA”) has issued its Decision and Reasons dated November 27, 2018 in connection with a hearing held in Toronto, Ontario on May 16-17 and May 25, 2018 in the matter of Mahmoud Rihawi, Attal Golzay, Ajmal Golzay, Roomal Golzay, Mustafa Sayed Hashimi, Zobair Hashimi, Sama Tabesh, Saadet Kolgekaya, Rhea Galias Fortes, Shameel Rawani, Anjum Pathan, and Mohammad Yunas Masood (collectively the “Respondents”).

In its Decision and Reasons, the Hearing Panel outlines its reasons for its findings of misconduct against the Respondents. Specifically, the Hearing Panel found that the Respondents committed the following violations:

Mahmoud Rihawi

Allegation #1:

Between January 26, 2012 and August 21, 2014, Mahmoud Rihawi falsified, fabricated or altered:

  1. clients’ Know-Your-Client (“KYC”) information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least eight investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between January 26, 2012 and August 21, 2014, Mahmoud Rihawi failed to ensure that at least eight investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Mahmoud Rihawi engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing in March 6, 2015, Mahmoud Rihawi misled MFDA Staff during an interview and/or failed to produce copies of documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Attal Golzay

Allegation #1:

Between 2008 and August 21, 2014, Attal Golzay falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least one investment loan to purchase mutual funds on behalf of a client, 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.

Allegation #2:

Between 2008 and August 21, 2014, Attal Golzay failed to ensure that at least one investment loan recommended to a client was suitable for the client and in keeping with the client’s investment objectives, having regard to the client’s relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Attal Golzay engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #4:

Between December 12, 2011 and August 21, 2014, Attal Golzay failed to fulfill his responsibilities as Branch Manager by failing to adequately supervise the other Respondents to this proceeding, and report to the Member that the Respondents to this proceeding (including himself) were falsifying, fabricating or altering client KYC information and client documents in order to obtain investment loans to purchase mutual funds, which prevented the Member from conducting a reasonable supervisory investigation and take such other supervisory measures as may have been warranted in the circumstances, contrary to MFDA Rules 2.5.1, 2.5.5, 1.1.2, and 2.1.1, and MFDA Policy No. 2.

Allegation #6:

Commencing in March 2015, Attal Golzay misled MFDA Staff during an interview conducted pursuant to an MFDA investigation, contrary to section 22.1 of MFDA By-law No. 1.

Ajmal Golzay

Allegation #1:

Between May 8, 2012 and August 21, 2014, Ajmal Golzay falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least two investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between May 8, 2012 and August 21, 2014, Ajmal Golzay failed to ensure that at least two investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Ajmal Golzay engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing in March 6, 2015, Ajmal Golzay misled MFDA Staff during an interview and/or failed to produce copies of documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Roomal Golzay

Allegation #1:

Between 2008 and August 21, 2014, Roomal Golzay falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least three investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between 2008 and August 21, 2014, Roomal Golzay failed to ensure that at least three investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Roomal Golzay engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #5:

Commencing December 2014, Roomal Golzay failed to attend an interview with MFDA Staff and produce information, documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Mustafa Sayed Hashimi

Allegation #1:

Between 2008 and August 21, 2014, Mustafa Sayed Hashimi falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least 51 investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between 2008 and August 21, 2014, Mustafa Sayed Hashimi failed to ensure that at least 51 investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Mustafa Sayed Hashimi engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing June 10, 2015, Mustafa Sayed Hashimi misled MFDA Staff during an interview conducted pursuant to an investigation of the MFDA, contrary to section 22.1 of MFDA By-law No. 1.

Zobair Hashimi

Allegation #1:

Between March 29, 2012 and August 21, 2014, Zobair Hashimi falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least two investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between March 29, 2012 and August 21, 2014, Zobair Hashimi failed to ensure that at least two investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Zobair Hashimi engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #5:

Commencing December 2014, Zobair Hashimi failed to attend an interview with MFDA Staff and produce information, documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Saadet Kolgekaya

Allegation #1:

Between 2008 and August 21, 2014, Saadet Kolgekaya falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least ten investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between 2008 and August 21, 2014, Saadet Kolgekaya failed to ensure that at least ten investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Saadet Kolgekaya engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing in May 28, 2015, Saadet Kolgekaya misled MFDA Staff during an interview conducted pursuant to an investigation of the MFDA, contrary to section 22.1 of MFDA By-law No. 1.

Rhea Galias Fortes

Allegation #1:

Between May 16, 2012 and August 21, 2014, Rhea Galias Fortes falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least one investment loan to purchase mutual funds on behalf of a client, 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.

Allegation #2:

Between May 16, 2012 and August 21, 2014, Rhea Galias Fortes failed to ensure that at least one investment loan recommended to a client was suitable for the client and in keeping with the client’s investment objectives, having regard to the client’s relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Rhea Galias Fortes engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing in April 29, 2015, Rhea Galias Fortes misled MFDA Staff during an interview and/or failed to produce copies of documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Shameel Rawani

Allegation #1:

Between January 10, 2010 and August 21, 2014, Shameel Rawani falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least three investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between January 10, 2010 and August 21, 2014, Shameel Rawani failed to ensure that at least three investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Shameel Rawani engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #5:

Commencing December 2014, Shameel Rawani failed to attend an interview with MFDA Staff and produce information, documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Anjum Pathan

Allegation #1:

Between January 10, 2010 and August 21, 2014, Anjum Pathan falsified, fabricated or altered:

  1. his own KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain, for himself, an investment loan to purchase mutual funds, 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.

Allegation #2:

Between January 10, 2010 and August 21, 2014, Anjum Pathan failed to ensure that the investment loan he processed and obtained for himself (and his wife) was suitable and in keeping with his and his wife’s investment objectives, having regard to his and his wife’s relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Anjum Pathan engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #5:

Commencing December 2014, Anjum Pathan failed to attend an interview with MFDA Staff and produce information, documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Mohammad Yunas Masood

Allegation #1:

Between November 8, 2013 and August 21, 2014, Mohammad Yunas Masood falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statements, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least three investment loans to purchase mutual funds on behalf of clients, 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.

Allegation #2:

Between November 8, 2013 and August 21, 2014, Mohammad Yunas Masood failed to ensure that at least three investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Mohammad Yunas Masood engaged in conduct unbecoming Approved Persons by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #5:

Commencing December 2014, Mohammad Yunas Masood failed to attend an interview with MFDA Staff and produce information, documents and records requested by MFDA Staff during the course of an investigation, contrary to section 22.1 of MFDA By-law No. 1.

Sama Tabesh

In an Agreed Statement of Facts dated May 15, 2018, Sama Tabesh admitted to the following misconduct:

Allegation #1:

Between 2008 and August 21, 2014, Sama Tabesh falsified, fabricated or altered:

  1. clients’ KYC information such as income, net worth, investment objectives, and risk tolerance on account forms submitted to the Member, including new account application forms; and
  2. information on loan applications and client documents submitted to lenders, including bank statemsents, investment statements, pay stubs, or Canada Revenue Agency Notices of Assessment;

in order to obtain at least six investment loans to purchase mutual funds on behalf of clients, 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;

Allegation#2:

Between 2008 and August 21, 2014, Sama Tabesh failed to ensure that at least six investment loans recommended to clients were suitable for the clients and in keeping with the clients’ investment objectives, having regard to the clients’ relevant KYC information and financial circumstances, contrary to the Member’s policies and procedures, and MFDA Rules 2.2.1 and 2.1.1.

Allegation #3:

Commencing December 2013, Sama Tabesh engaged in conduct unbecoming an Approved Person by providing false and misleading responses to the Member during the course of the Member’s investigation into their conduct, contrary to MFDA Rule 2.1.1.

Allegation #6:

Commencing in March 2015, Sama Tabesh misled MFDA Staff during an interview conducted pursuant to an investigation, contrary to section 22.1 of MFDA By-law No. 1.

In its Decision and Reasons, the Hearing Panel imposed sanctions on the Respondents. In particular, the Hearing Panel ordered a permanent prohibition from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member on each of the Respondents, and the following additional penalties:

Mahmoud Rihawi

  • a fine in the amount of $85,000, the particulars of which are:
    • $15,000 for allegations # 1 and 2;
    • $20,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Attal Golzay

  • a fine in the amount of $110,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $20,000 for allegation #3;
    • $30,000 for allegation #4;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Ajmal Golzay

  • a fine in the amount of $70,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Roomal Golzay

  • a fine in the amount of $70,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Mustafa Sayed Hashimi

  • a fine in the amount of $85,000, the particulars of which are:
    • $15,000 for allegations #1 and #2;
    • $20,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Zobair Hashimi

  • a fine in the amount of $80,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $20,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Saadet Kolgekaya

  • a fine in the amount of $80,000, the particulars of which are:
    • $15,000 for allegations #1 and #2;
    • $20,000 for allegation #3;
    • $50,000 for allegation #6; and
  • costs in the amount of $2,500.

Rhea Galias Fortes

  • a fine in the amount of $40,000, the particulars of which are:
    • $5,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $25,000 for allegation #5; and
  • costs in the amount of $2,500.

Shameel Rawani

  • a fine in the amount of $70,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $50,000 for allegation #5; and
  • costs in the amount of $2,500.

Anjum Pathan

  • a fine in the amount of $65,000, the particulars of which are:
    • $5,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $50,000 for allegation #5; and
  • costs in the amount of $2,500.

Mohammad Yunas Masood

  • a fine in the amount of $70,000, the particulars of which are:
    • $10,000 for allegations #1 and #2;
    • $10,000 for allegation #3;
    • $50,000 for allegation #5; and
  • costs in the amount of $2,500.

Sama Tabesh

  • a fine in the amount of $35,000, the particulars of which are:
    • $15,000 for allegations #1 and #2;
    • $20,000 for allegation #3; and
  • costs in the amount of $5,000.

Copies of the Decision and Reasons and the Agreed Statement of Facts (Tabesh) are available on the MFDA website at www.mfda.ca. During the period described in the Decision and Reasons, the Respondents conducted business in Mississauga, Ontario.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 82,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA’s complaint and enforcement processes, as well as links to ‘Check an Advisor’ and other Investor Tools, visit the For Investors page on the MFDA website.

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