Brampton Mutual Fund Owner Facing Disciplinary Action After Breaking By-Laws
A Brampton mutual fund sales representative is facing disciplinary action after reportedly breaking the Mutual Fund Dealers Association of Canada’s (“MFDA”) policies, rules and by-laws, the MFDA says.
Lachman Hassaram Balani is a registered mutual fund salesperson with Shah Financial Planning Inc., a member of the MFDA, since April 8, 2010. He also had a sub-branch in Brampton.
In 2013, the MFDA says it examined Balani's files and identified 89 account and trade forms in 23 client files that had been signed by the clients when the forms were blank or only partially complete. According to the MFDA, Balani completed trade instructions and added other information to the forms after the clients had signed them. Balani also dated the forms or altered pre-existing dates to execute transactions. Balani then submitted the forms to Shah Financial Planning Inc. to process trades and conduct business on its behalf.
These forms ranged from investment loan redemption/ repurchase forms, investment loan/ self-directed account switch forms, trade order forms, non-financial account change forms and client information change forms.
The MFDA states that Balani broke MFDA Rule 2.1, and so they imposed a fine of $10,000 and additional costs of $2,500.
However, further allegations have come up against Balani after this hearing panel.
According to the MFDA, Balani prepared and submitted new account application forms and investment loan applications for at least two clients, which Balani knew contained false, misleading or incorrect information. The incidents occurred between October 2010 and November 20, 2016.
During the same time, MFDA says Balani misrepresented, failed to fully and adequately explain, or omitted to explain, the risks, benefits, material assumptions, features and costs of a leveraged investment strategy that he recommended to at least two clients. Thus, he failed to ensure that the leveraged investment recommendations were suitable for the clients and their investment objectives. He also did not ensure that the clients’ could afford the costs associated with the investment loans and withstand investment losses.
The MFDA states that Balani broke MFDA Rules 2.2.1 and 2.1.1, and MFDA Policy No. 2.
Balani is set to sit before the MFDA’s Central Regional Council on September 10 at 10:00 a.m.
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