Two brothers, Kamran Shahid and Imran Shahid, have been fined $345,000. They sold universal life insurance to newcomers with little financial knowledge.
On May 2, Judge Mélanie Hébert of the Court of Québec, district of Montréal, ratified this penalty in connection with the penal proceedings instituted by Quebec financial sector regulator, the Autorité des marchés financiers (AMF).
Kamran Shahid pleaded guilty to 11 counts of making a misrepresentation to an insurer or a client when pursuing activities governed by the Act respecting the distribution of financial products and services (the Distribution Act), as well as 10 counts of aiding in the illegal pursuit of activities as an insurance representative and one count of contravening the instructions of a client, said the AMF in a May 22 statement. He was fined a total of $155,000.
For his part, Imran Shahid pleaded guilty to nine counts of making a misrepresentation to an insurer or a client when pursuing activities governed by the Distribution Act and nine counts of illegally pursuing activities as an insurance representative. He was fined a total of $190,000.
In exchange for the guilty pleas, the AMF withdrew a total of 12 counts, including one count against the company 9322-5746 Québec inc.
The AMF's investigation showed that Kamran Shahid was registered with the AMF as a representative in insurance of persons at the time of the alleged facts. “In the course of his practice, and in collaboration with his brother Imran, he solicited members of Montréal's Pakistani and Indian communities by placing ads on the radio and in newspapers serving these communities,” explained the AMF.
The Shahid brothers used six schemes to sell universal life insurance policies to at least 15 individuals. “These clients were mostly newcomers with little or no financial knowledge and in precarious financial situations. In most cases, the insurance applications were filled out without the clients being present and contained many misrepresentations,” said the regulator.