The Mutual Fund Dealers Association of Canada (MFDA) has fined Azhar Ahmad Batla, a Toronto, Ontario former dealing representative with Investors Group Financial Services Inc., $145,000 plus costs in the amount of $15,000 after a hearing panel found that allegations of misappropriation were established.
According to the regulator’s notice of hearing, Batla received a $70,000 bank draft from a client, made payable to the firm. The client instructed the representative to invest the proceeds in a non-registered account belonging to the client’s spouse. Instead of following those instructions, Batla deposited the bank draft into his personal account at Investors Group.
To process the transaction, he completed a large cash transaction record indicating that the money came from his own spouse’s income. Batla then earned $900 in commissions from the mutual fund purchases he processed in his own investment account, before withdrawing the majority of the money, using it for personal expenses and repayment of his debts.
Batla reportedly repaid the client $11,500 and the firm compensated the client $56,224.54 to cover the amounts not repaid. Batla was terminated in September 2019 and is not currently registered.
In addition to the misappropriation, Batla is being sanctioned for indicating that his spouse was the source of the money in question, and also for saying the money deposited into his own account needed to be withdrawn because of a miscommunication between his spouse and himself about the original amount to be invested.
In addition to the monetary penalties, Batla is also permanently banned from conducting securities related business in any capacity while employed or associated with any MFDA member firm.
