TORONTO, Aug. 27, 2012 /CNW/ - A disciplinary hearing in the matter of Faisal Amin Satti ("Satti") and Kamran Ghani ("Ghani") was held today in Toronto, Ontario before a three-person Hearing Panel of the MFDA's Central Regional Council. The Hearing Panel found that the allegations set out in the Notice of Hearing dated April 20, 2012 had been established:
Allegation #1: Between January 2008 and May 2008, Satti engaged in conduct unbecoming an Approved Person by intentionally submitting client account opening documents and loan applications for 22 clients that contained false and misleading information, contrary to MFDA Rule 2.1.1.
Allegation #2: In almost all instances in Allegation #1 above in which Satti submitted documents containing false or misleading information, Satti had the clients sign the documents with limited or no information populated on the documents and thereafter Satti completed the documents using information he knew to be false or misleading, thereby engaging in conduct unbecoming an Approved Person by obtaining and using blank pre-signed forms, contrary to MFDA Rule 2.1.1.
Allegation #3: Between November 5, 2007 and October 28, 2008, Satti engaged in conduct unbecoming an Approved Person by fabricating documents in respect of 15 clients that he submitted in support of new client account applications and loan applications, contrary to MFDA Rule 2.1.1.
Allegation #4: Between February 2008 and March 2008, Satti engaged in conduct unbecoming an Approved Person by opening accounts in the names of IH and SV, each of whom he had never met, and thereafter obtaining investment loans in the names of IH and SV and using the loan proceeds to purchase mutual funds for the accounts of IH and SV, all without the knowledge or approval of IH and SV, contrary to MFDA Rule 2.1.1.
Allegation #5: In or about August 2008, Satti met with MK and obtained MK's signature on another Member's account opening documents and a loan application for the purpose of implementing through that other Member a leveraged investment strategy that Satti had recommended to MK, which documents Satti then provided to Ghani in October 2008 for processing through that other Member, thereby engaging in securities related business that was not carried on for the account and through the facilities of Satti's Member and failing to treat MK fairly, honestly and in good faith, contrary to MFDA Rules 1.1.1(a) and 2.1.1.
Allegation #6: By engaging in the conduct described in Allegation #5 above, Ghani failed to learn the essential facts relative to each client and each order accepted and failed to treat MK fairly, honestly and in good faith, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #7: Between February 2008 and May 2008, Satti facilitated stealth advising by Ghani, who was not registered as a mutual fund salesperson at the material time, by opening accounts for 12 clients under his (Satti's) representative code, processing investment loan applications for the clients and purchasing mutual funds for the accounts of the clients, contrary to MFDA Rules 2.2.1 and 2.1.1.
Allegation #8: On or about June 9, 2008, Satti submitted an application for employment to a Member containing false or misleading information and thereafter made false or misleading representations to the Member concerning matters relating to the application, thereby engaging in conduct unbecoming an Approved Person, contrary to MFDA Rule 2.1.1.
The Hearing Panel imposed the following penalties and costs at the conclusion of the hearing and advised that it will issue written reasons for its decision in due course:
- Satti is permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member;
- Ghani is permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member;
- Satti shall pay a fine of $500,000;
- Ghani shall pay a fine of $150,000;
- Satti shall pay costs of $7,500; and
- Ghani shall pay costs of $7,500.
The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its 121 Members and their approximately 75,000 Approved Persons with a mandate to protect investors and the public interest.
SOURCE Mutual Fund Dealers Association of Canada