A former mutual fund representative has been sanctioned for regulatory violations stemming from a stock tip channel he operated on social media platform Discord, which regulators said amounted to providing investment advice.
Following a hearing, a panel of the Canadian Investment Regulatory Organization (CIRO) sanctioned Adib Khaldi, a former rep with Scotia Securities Inc., who was suspended for two years, fined $15,000 and ordered to pay costs of $10,000. He was also ordered to rewrite the Conduct and Practices Handbook course.
The sanctions follow a finding that Khaldi violated the self-regulatory organization’s (SRO) rules by engaging in an outside business activity, in this case by providing investment advice in an online forum and receiving subscription fees through that forum, among other allegations.
Previously, the panel found that Khaldi violated the SRO’s rules by running a Discord channel, Super Picks, which he operated under the pseudonym Deebo. Subscribers reportedly paid for access to the site, which posted stock picks.
This amounted to conducting securities-related business outside his dealer, the panel ruled.
“Contrary to [Khaldi’s] assertion that Simple Picks was a personal journal and for entertainment purposes, the panel finds that the inclusion of buy and sell advice together with stop loss instructions constitutes giving advice to any person who accessed the site,” the panel said.
“Advertising the Simple Picks site and soliciting subscription fees is not consistent with Simple Picks being a personal journal,” it said.
The panel noted that Khaldi argued he didn’t intend to be associated with the site personally, and that exposing his identity was a breach of his privacy rights and of the Charter of Rights and Freedoms.
However, it said CIRO’s authority is created via contract, not through statute, and, as a result, the Charter does not apply.
Ultimately, the panel concluded that operating the channel amounted to conducting securities-related business, which violated the SRO’s rules.