CIRO issues decision in settlement case
The Canadian Investment Regulatory Organization (CIRO) has permanently banned former dealing representative Mohammed (Hamoudi) Dakik from the securities industry and ordered him to pay $25,000 in fines and costs after he admitted to engaging in unapproved investment activities that caused client losses.
The decision, released Sept. 5 following a settlement hearing on Aug. 14, found that Dakik recommended, sold, or facilitated the sale of securities in a cannabis company, CBD Export Global, outside of his registered dealer, Investors Group Financial Services Inc. The transactions, which took place between March and September 2019, involved about $76,000 from five clients and two individuals.
According to CIRO, one of the investors, a 68-year-old retiree identified as WE, placed $50,000 into the venture, which was later dissolved without returning funds. The other investors contributed amounts ranging from $1,000 to $6,000. None received repayment.
The panel noted that Dakik also solicited another client to invest or loan as much as $100,000 to the cannabis business, but that client declined. Dakik had personally invested in the company and continued providing updates to investors even after his termination from Investors Group in October 2020.
The sanctions include a permanent prohibition from conducting securities-related business with any CIRO member, a $20,000 fine, and $5,000 in costs. Dakik, who attended the hearing, is no longer registered in the securities industry.
In its written reasons, the Ontario district hearing panel said the sanctions were “within a reasonable range of appropriateness,” citing the seriousness of the misconduct. “By engaging in securities related business outside of the Dealer Member, the Respondent subverted the Dealer Member’s ability to effectively supervise his activities,” the panel wrote.
The panel considered mitigating factors, including Dakik’s lack of prior disciplinary history and his cooperation with investigators. However, it highlighted aggravating circumstances such as the financial harm to clients and the dealer, and Dakik’s knowledge of the prohibition against such activities. Investors Group compensated WE for the $50,000 loss.
Details of disciplinary proceedings and advisor records are available through its website and AdvisorReport service.
