Quebec tribunal overturns IIROC decision against rep

Quebec’s Financial Markets Administrative Tribunal has overturned a decision of an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel.

In a decision released on Nov. 27, the tribunal found that the self-regulatory organization shouldn’t have brought an enforcement case against rep Ali Reza Sultani for misstatements regarding his dismissal from a previous firm, after the SRO decided to grant him registration.

The Tribunal’s decision overturns an IIROC hearing panel’s findings that Sultani violated IIROC rules by making false statements to his new employer, RBC Direct Investing Inc., and falsifying IIROC documents that set out the reasons for his termination from his previous employer, CIBC Securities Inc. The IIROC panel ordered Sultani be suspended for six months and fined $2,000 in connection with its findings.

However, the hearing panel wrestled with IIROC’s knowledge about the misstatements when it granted Sultani registration, only to pursue an enforcement case against him soon after.

In its penalty decision, the panel noted that it was “concerned about the decision of IIROC granting registration with knowledge of the violations and shortly thereafter ordering an investigation, instead of satisfying itself before registration that all angles had been covered.”

The Tribunal dismissed the IIROC panel’s findings against Sultani, amid the same concern that he faced discipline for conduct that had already been reviewed by the SRO in granting registration. The proceeding undertaken by IIROC against Sultani was “duplicative of the decision already rendered upon the reactivation of his registration and constitutes an abuse of process,” the panel stated in its decision, and dismissed the penalties imposed as a result of the IIROC panel’s findings.

However, the tribunal declined to reprimand IIROC  in connection with the case, saying that it was’t warranted in this case.

In addition, the tribunal dismissed Sultani’s request that publications on the web involving his case be taken down, saying that this would not serve the public interest, and it denied his request for costs, noting that it doesn’t have the power to order costs.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.