fine-justice

The Partners, Directors and Senior Officers course (PDO) requires 50 to 65 hours of study — something Rizwan Suleiman apparently realized too late.

The former registered rep finished only part of the PDO because he was unprepared. Ostensibly concerned that multiple PDO attempts would look bad, IIROC found he later altered the exam transcript to show he passed with 77.5%. According to IIROC’s Reasons and Decision, he sent the altered transcript to his firm and also emailed his manager with the good news. His firm discovered the misconduct and confronted him.

Read: IIROC fines, suspends former rep for altering exam transcript

This past June, about a year after his transgression, an IIROC hearing panel imposed the following sanctions against Suleiman:

  • a six-month suspension from registration;
  • a fine of $30,000;
  • a requirement to re-write industry exams within 12 months of re-registration; and
  • costs of $5,000.

At press time, Suleiman and his lawyer had not responded to multiple requests for comment.

The facts

Elsa Renzella, vice-president of enforcement at IIROC, says, “The hearing panel considered all relevant facts […] agreed to by the parties and set out in an agreed statement of facts.”

John Fabello, a partner at Torys in Toronto, sums up the relevant facts from IIROC’s Reasons and Decision document:

  1. Suleiman had no prior disciplinary record.
  2. He was under personal stress (not compelling “as a full answer,” Fabello says, but important to consider in the context of the other facts).
  3. There was no client harm.

Fabello, who was not involved in the case, further points out that Suleiman didn’t profit from his deceit. Indeed, the only immediate benefit from passing the exam — $2,000 from his firm for gym membership fees — went unused.

“The fact pattern suggests it’s a one-off,” he says.

To Fabello’s mitigating factors, Ryan Morris, a partner at Blake, Cassels & Graydon in Toronto, adds that Suleiman didn’t try to cover up his misconduct once confronted.

The analysis

Morris, who was not involved in the case, says the sanctions show IIROC is serious about misconduct despite mitigating factors.

“Wilful and dishonest conduct [… carried] the day for [the panel],” he says. “Without those mitigating factors, maybe he was looking at something closer to what IIROC staff was asking for — a full-year suspension, a $50,000 fine, $10,000 in costs. […] If there were client or investor harm, you would’ve seen a more severe sanction.”

Read: Why entites are sharing info on disciplined registrants

Fabello questions whether a suspension plus fine is excessive. IIROC typically insists on both, but “you don’t need both to achieve [IIROC’s] goals of specific and general deterrence,” he says. Losing half a year’s income plus paying a $30,000 fine — the latter, effectively $60,000 of pre-tax income — adds up to a year’s worth of work, Fabello notes.

Morris says, “The panel still see[s] [fines] to be a deterrent even if the fine is not ultimately collected.” (Wrongdoers can avoid fines by deregistering from IIROC, and IIROC has court authority in only Alberta and Quebec to collect fines from individuals.)

What misconduct warrants a permanent ban?

Fraud on multiple clients, intentional wrongdoing that harms clients directly or a pattern of deceptive behaviour could all merit such a sanction, says Fabello.

Read: How banned IIROC and MFDA advisors can still sell insurance

In effect, a ban of specified length could become a de facto permanent ban, suggests Morris. “If you’re out of the industry for two or three years, do you get back in? Are you doing what you were doing before? Are you able to build your client base up again?” he asks skeptically.

Although, as of press time, Suleiman’s sanctions have yet to be posted on CSA’s website, the site indicates he hasn’t been registered since July 2015. According to the hearing, he’s now an independent contractor earning less money.

Originally published on Advisor.ca
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