October 19, 2021 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (the “MFDA”) has commenced disciplinary proceedings in respect of Muhamad Asghar Sadiq (the “Respondent”). In its Notice of Hearing dated September 14, 2021 (the “Notice of Hearing”), Staff of the MFDA alleges that the Respondent engaged in the following conduct contrary to the By-laws, Rules and/or Policies of the MFDA:
Allegation #1: Between March 2011 and October 2016, the Respondent failed to use due diligence to learn and accurately record or intentionally misrepresented the essential facts relative to at least 11 clients, contrary to the Member’s policies and procedures and MFDA Rules 2.2.1, 2.1.1, 2.5.1, and 1.1.2.
Allegation #2: Between August 2014 and June 2015, the Respondent submitted supporting documents to the Member in connection with loan applications of at least 4 clients, which the Respondent knew or ought to have known contained false, incorrect, or misleading information, contrary to MFDA Rule 2.1.1.
Allegation #3: Between March 2011 and July 2015, the Respondent failed to ensure that the leveraged investment strategy and the underlying investments that he recommended and implemented in the accounts of at least 10 clients were suitable for the clients, in keeping with the clients’ risk tolerances, investment knowledge, and ability to withstand the potential costs and investment losses, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #4: Between March 2011 and July 2015, the Respondent misrepresented, failed to fully and adequately explain, or omitted to explain the risks, benefits, material assumptions, costs, and features of the leveraged investment strategy and the underlying investments that he recommended and implemented in the accounts of at least 11 clients, thereby failing to ensure that the leverage investment strategy and underlying investments were suitable for the clients, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #5: Between August 2014 and August 2018, while registered as a dealing representative of a Member, the Respondent engaged in securities related business on behalf of another Member that the Respondent was not registered with, contrary to MFDA Rules 1.1.1 and 2.1.1.
Allegation #6: Between October 2016 and August 2018, the Respondent misappropriated or failed to account for monies received from 7 clients and 1 individual, contrary to MFDA Rule 2.1.1.
Allegation #7: From about September 2016 to January 2019, the Respondent recommended to 1 client and 1 individual that they open and invest money through an investment account with a Futures Commission Merchant in the U.S., and managed or provided instructions in connection with the trading in the account, thereby engaging in securities related business outside the Member, contrary to the Member’s Policies and Procedures, MFDA Rules 1.1.1, 2.1.1, 2.5.1, and 1.1.2, and the terms of the Respondent’s registration as a dealing representative.
Allegation #8: Between August 2, 2018 and December 5, 2018, the Respondent engaged in personal financial dealings with a client by providing the client with monies to pay her investment loan payments, which gave rise to a conflict or potential conflict of interest that the Respondent did not disclose to the Member or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 2.1.1, 2.5.1, and 1.1.2.
The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA’s Central Regional Council on November 22, 2021 at 10:00 a.m. (Eastern), or as soon thereafter as the appearance can be held, to schedule a date for the commencement of the hearing on the merits and to address any other procedural issues. The appearance will be open to the public, except as may be required for the protection of confidential matters. Members of the public who would like to listen to the teleconference should contact [email protected] to obtain particulars.
A copy of the Notice of Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Notice of Hearing, the Respondent conducted business in the Mississauga, Ontario area.
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 80,000 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.