May 23, 2017 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) has commenced disciplinary proceedings in respect of Mahmoud Rihawi (“Rihawi”), Attal Golzay (“Attal”), Ajmal Golzay (“Ajmal”), Roomal Golzay (“Roomal”), Mustafa Sayed Hashimi (“Mustafa”), Zobair Hashimi (“Zobair”), Sama Tabesh (“Tabesh”), Saadet Kolgekaya (“Kolgekaya”), Hammond Lieu (“Lieu”), Rhea Galias Fortes (“Fortes”), Shameel Rawani (“Rawani”), Anjum Pathan (“Pathan”), Mohammad Yunas Masood (“Masood”) and Juliene da Rosa Lima (“Lima”) (collectively referred to as the “Respondents”). In its Notice of Hearing dated February 28, 2017, Staff of the MFDA alleges that the Respondents engaged in the following conduct contrary to the By-laws, Rules and/or Policies of the MFDA:
Allegation #1: Between 2008 and August 21, 2014, the Respondents falsified, fabricated or altered:
- 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
- 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, the Respondents 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 “Know-Your-Client” 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, the Respondents 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 failed to fulfill his responsibilities as Branch Manager by failing to adequately supervise the Respondents, and report to the Member that the Respondents (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 #5: Commencing in December 2014, Pathan, Roomal, Zobair, Rawani, and 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.
Allegation #6: Commencing in March 2015, Rihawi, Mustafa, Tabesh, Attal, Ajmal, Kolgekaya, and 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.
The first appearance in this proceeding will take place by teleconference before a Hearing Panel of the MFDA’s Central Regional Council on June 7, 2017 at 9:30 a.m. (Eastern), or as soon thereafter as the appearance can be held, in order to schedule a date for the commencement of the hearing on the merits and to address any other procedural matters. The appearance will be open to the public, except as may be required for the protection of confidential matters.
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 83,000 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.