A hearing panel of the Canadian Investment Regulatory Organization (CIRO) imposed a one-year ban from conducting securities related business on Aziz Khamisa and has prohibited Khamisa from being an officer, director, or supervisor in any capacity for five years. The former chief compliance officer and ultimate designated person is being sanctioned for failing to disclose an agreement that was material to a proposed transaction to change control of the firm he was working for to himself.
Specifically, he is being sanctioned for failing to provide full disclosure of the material terms of the transaction and for misleading the regulator concerning the full terms of the proposed change of control, when he entered into a share purchase agreement with Antony Kin San Chau, who is known to the regulator. When he did so, he also entered into a second agreement with Chau, known as “the spirit agreement,” which purported to give Chau control over the material aspects of the firm’s operations and business. “The spirit agreement also provided that all of the above terms take priority over the terms of the share purchase agreement,” the settlement agreement between Khamisa and CIRO staff states.
When asked for the documentation required by the regulator to determine if the transaction was suitable, neither provided a copy of the spirit agreement, or disclosed its terms or existence to the regulator. When questioned, Khamisa told regulatory staff that Chau would continue with the member only as a dealing representative. “The spirit agreement, had it been disclosed, would have been relevant and material to staff’s analysis of the proposed change of control.”
No longer registered in the securities industry
Registered in the securities industry since December 2006, the Richmond Hill, Ontario-area representative is no longer registered in the securities industry in any capacity. The firm in question resigned its membership in August 2022.
In addition to the prohibition preventing him from practicing or serving as a director or supervisor, the former representative was also ordered to pay a fine in the amount of $40,000 and costs totalling $5,000.
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