Subject: LAW
CIRO hearing panel makes findings of misconduct against Adib Khaldi and sets date for hearing on sanctions
HALIFAX, NS, Dec. 28, 2023 /CNW/ - The Canadian Investment Regulatory Organization (CIRO), commenced a disciplinary proceeding in respect of Adib Khaldi (also known as Deebo) by Notice of Hearing dated October 5, 2022 (Notice of Hearing), as amended on September 13, 2023 (Amended Notice of Hearing).
The hearing of this matter on its merits was held electronically by videoconference on September 26-27 and December 8, 2023, before a three-member hearing panel of the CIRO Nova Scotia District Hearing Committee. After receiving evidence and hearing submissions from CIRO Staff about misconduct, the hearing panel found that the three allegations in the Notice of Hearing had been established. In particular, the hearing panel made the following findings of misconduct:
#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).
#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).
#3: Between approximately May 2019 and May 2020, the Respondent processed transactions in respect of approximately 23 clients as redemptions and purchases, rather than as switches, thereby:
a. 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
b. 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 hearing panel will issue written reasons for their decision on misconduct in due course.
A penalty hearing will take place electronically by videoconference before a hearing panel of the Nova Scotia District Hearing Committee on February 15, 2024 at 11:00 a.m. (Atlantic Time). The proceeding will continue to be open to the public, except as may be required for the protection of confidential matters. Members of the public who would like to participate should contact [email protected] to obtain particulars.
A copy of the Amended Notice of Hearing is available on the MFDA website at www.mfda.ca.
During the period described in the Notice of Hearing, Adib Khaldi conducted business in the Dartmouth, Nova Scotia area.
All information about disciplinary proceedings relating to current and former member firms and individual registrants under the Investment Dealer and Partially Consolidated Rules (for investment dealers), the Mutual Fund Dealer Rules (for mutual fund dealers) and the Universal Market Integrity Rules (UMIR) is available on CIRO's website.
Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by CIRO-regulated investment firms is available free of charge through the AdvisorReport service. Information on how to make dealer, advisor or marketplace-related complaints is available by calling 1-877-442-4322.
CIRO investigates possible misconduct by its member firms and individual registrants. It can bring disciplinary proceedings which may result in sanctions including fines, suspensions, permanent bars, expulsion from membership, or termination of rights and privileges for individuals and firms.
The Canadian Investment Regulatory Organization (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 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. |
SOURCE Canadian Investment Regulatory Organization (CIRO)
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