MFDA Hearing Panel makes findings of misconduct against Mohammad Movassaghi

March 22, 2021 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada (“MFDA”) commenced a disciplinary proceeding in respect of Mohammad Movassaghi (“Respondent”) by Notice of Hearing dated March 21, 2019, most recently amended on December 10, 2019 “(Notice of Hearing”).

The hearing of this matter on its merits resumed on March 19, 2021, by electronic hearing in Vancouver, British Columbia before a three-member Hearing Panel of the MFDA’s Pacific Regional Council. Following submissions by Staff of the MFDA as to misconduct, the Hearing Panel found that the following allegations set out in the Notice of Hearing against the Respondent were established:

1. 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.
2. 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;
3. 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.
4. 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.
5. 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 1.3.2^[2]], 1.4, 2.1.1, 2.5.1, 2.10 and 1.1.2.

The Hearing Panel advised that it will issue written reasons for its decision as to misconduct in due course. Submissions with respect to sanctions will take place by electronic hearing before the Hearing Panel on a date to be determined and announced accordingly. Members of the public who would like to participate should contact [email protected] to obtain particulars.

A copy of the Fresh as Amended Notice of Hearing is available on the MFDA website at www.mfda.ca. During the period described in the Notice of Hearing, the Respondent conducted business in Vancouver, British Columbia 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 80,000 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.

[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.