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Charles Toth
Vice President, Enforcement

MFDA announces disciplinary proceeding in respect of Adib Khaldi

November 2, 2022 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (the “MFDA”) has commenced disciplinary proceedings in respect of Adib Khaldi (also known as “Deebo”) (the “Respondent”). In its Notice of Hearing dated October 5, 2022 (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 July 2020 and September 2020, the Respondent engaged in securities related business outside the Member by providing investment advice to individuals in respect of non-mutual fund securities through the use of an online forum, contrary to MFDA Rules 1.1.1, 2.1.1, and 1.1.2 (as it relates to Rule 2.5.1).

Allegation #2: Between July 2020 and September 2020, the Respondent engaged in an unapproved outside activity by receiving monthly subscription payments in relation to an online forum where he provided investment advice to individuals, contrary to the Member’s policies and procedures and MFDA Rules 1.3, 2.1.1, and 1.1.2 (as it relates to Rule 2.5.1).

Allegation #3: Between July 2019 and January 2020, the Respondent processed 18 transactions in respect of 13 clients as redemptions and purchases, rather than as switches, thereby:

  1. engaging in conduct which gave rise to a conflict of interest which the Respondent failed to disclose to the Member, or ensure was addressed by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to MFDA Rules 1.4[1] and 2.1.1; or
  2. failing to comply with the Member’s policies and procedures with respect to the processing of trades as switches, contrary to MFDA Rules 2.1.1 and 1.1.2 (as it relates to Rule 2.5.1).

The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA’s Atlantic Regional Council on December 1, 2022 at 12:00 p.m. (Atlantic), 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 hearings@mfda.ca 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 carried on business in the Dartmouth, Nova Scotia 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 76,695 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.

[1] On June 30, 2021, MFDA Rule 2.1.4 was amended to conform with client focused reform amendments to National Instrument 31-103 that came into effect on the same day.  As the conduct addressed in this Notice of Hearing pre-dated the amendment to this Rule, all allegations set out in this Notice of Hearing that make reference to that Rule concern the version of the Rule that was in effect between February 27, 2006 and June 30, 2021.

DM 898269