MFDA announces disciplinary proceeding in respect of Zahir Lehri

Allegation #1: Between May 2015 and August 2018, the Respondent allowed an Approved Person who was not registered with the Member to:

1. open new accounts at the Member for clients;
2. complete and submit for processing Know-Your-Client forms;
3. implement a leveraging strategy for these clients using false or inaccurate client financial documentation; and
4. process trades in the accounts of these clients using the Respondent’s representative code;

thereby:

1. facilitating stealth advising by the other Approved Person, contrary to MFDA Rules 1.1.1^[1] and 2.1.1; or
2. failing to use due diligence to learn the essential facts relative to the clients and to ensure that the leveraging strategy and investments that were recommended and implemented for clients were suitable, contrary to MFDA Rules 2.2.1^[2] and 2.1.1.

Allegation #2: Commencing May 2017, the Respondent misappropriated or failed to account for monies received from a client and another individual, contrary to MFDA Rule 2.1.1.

Allegation #3: Commencing October 2020, the Respondent failed to cooperate with an investigation into his conduct by Staff of the MFDA, contrary to section 22.1 of MFDA By-law No. 1.

[1] Effective January 21, 2021, MFDA Rule 1.1.1 was amended.  As the Respondent engaged in the alleged misconduct addressed in this proceeding prior to January 21, 2021, in this proceeding, Staff is relying on the version of MFDA Rule 1.1.1 that was in effect prior to the January 21, 2021 amendments.

[2] Effective December 31, 2021, MFDA Rule 2.2.1 was amended.  As the Respondent engaged in the alleged misconduct addressed in this proceeding prior to December 31, 2021, in this proceeding, Staff is relying on the version of MFDA Rule 2.2.1 that was in effect prior to the December 31, 2021 amendments.