CIRO Hearing Panel issues Reasons for Decision in the matter of Mohammad Movassaghi

TORONTO, Nov. 20, 2023 /CNW/ -  A Hearing Panel of the Canadian Investment Regulatory Organization ("CIRO"), has issued its Reasons for Decision (Misconduct) dated November 7, 2023 ("Reasons for Decision (Misconduct)"), in connection with a disciplinary hearing held electronically by videoconference in Vancouver, British Columbia on October 19-23, 2020, January 18-20, 2021, March 5, 2021, and March 19, 2021 in the matter of Mohammad Movassaghi (the "Respondent").

In its Reasons for Decision (Misconduct), the Hearing Panel outlined its findings of misconduct made against the Respondent. In particular, the Hearing Panel found that the Respondent:

a)      between April 2015 and October 2015, the Respondent:

• falsified client X's signature on 9 account forms; or
• knew or ought to have known that 9 account forms that were submitted for processing with respect to investment accounts of client X had not been signed by client X; or
• failed to exercise due diligence to ensure that 9 signed account forms that were submitted for processing with respect to investment accounts of client X had been signed by client X; contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 2.5.1, 2.10 and 1.1.2.

b)      between April 8, 2015 and June 9, 2015, the Respondent instructed KB to submit 3 KYC Update Forms to update records concerning the investment accounts of client X without the knowledge or authorization of client X, or in the alternative, the Respondent knew or ought to have known that 3 KYC Update Forms that were submitted to the Member to update account records of client X were submitted without the knowledge or authorization of client X and he failed to exercise due diligence to ensure that client X was aware of and had authorized the changes to her KYC information, contrary to the policies and procedures of the Member and MFDA Rules 2.2.1, 2.1.1, 2.5.1, 2.10, and 1.1.2;

c)      between January 2015 and June 2016, the Respondent processed or directed other Approved Persons or employees subject to his authority to process at least 180 trades in the investment accounts of client X without the knowledge or authorization of client X; or in the alternative, he knew or ought to have known that Approved Persons or employees subject to his authority were processing a large number of trades in the accounts of client X and he failed to exercise due diligence to ensure that client X had authorized all elements of the trades that were processed in client X's accounts, contrary to the policies and procedures of the Member and MFDA Rules 2.3.1(a) [now MFDA Rule 2.3.1(b))¹], 2.1.1, 2.10 and 1.1.2.

d)      between January 2015 and June 2016, the Respondent:

• created or in some cases directed another Approved Person or other employees who worked in his office to create records of purported instructions received from client X which had not in fact been received [the "Records of Instructions"]; or
• failed to exercise due diligence to ensure that the Records of Instructions accurately described instructions that had been received from client X; contrary to the policies and procedures of the Member and MFDA Rules 2.1.1, 5.1(b), 2.10, 2.5.1 and 1.1.2.

e)      between January 2014 and August 2016, the Respondent failed to disclose actual or potential conflicts of interest to the Member, contrary to the policies and procedures of the Member and MFDA Rules 1.2.1(c) [now Rule 1.3.2²], 2.1.4, 2.1.1, 2.5.1, 2.10 and 1.1.2.

Submissions with respect to sanctions will take place by electronic hearing before the Hearing Panel on a date to be determined and announced accordingly.

A copy of the Reasons for Decision (Misconduct) 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 Vancouver, British Columbia area.

CIRO is the national self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada's debt and equity marketplaces. CIRO is committed to the protection of investors, providing efficient and consistent regulation, and building Canadians' trust in financial regulation and the people managing their investments. For more information, visit www.ciro.ca.

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¹ On January 19, 2017, MFDA Rule 2.3.1 was amended.  The prohibition on discretionary trading was moved from MFDA Rule 2.3.1(a) to MFDA Rule 2.3.1(b).

² On March 17, 2016, MFDA Rule 1.2.1(c) was amended and renumbered as Rule 1.3.2.

SOURCE Canadian Investment Regulatory Organization (CIRO)

Joanna Nicholson, Manager, Public Affairs, [phone], [email protected]