The former owner of a fund dealer has been fined and permanently banned after a regulatory hearing panel found he didn’t fully disclose the terms of the firm’s sale.
A hearing panel of the Canadian Investment Regulatory Organization (CIRO) ordered that Antony Kin San Chau — former sole owner and controlling shareholder of TeamMax Investment Corp. — be fined $65,000, pay $6,000 in costs, and be banned from the industry for misleading the self-regulatory organization when he agreed to sell the firm to Aziz Fatehali Khamisa, who was its chief compliance officer, in 2020.
Previously, CIRO settled with Khamisa for the same violations.
Under that settlement agreement, Khamisa was fined $40,000 and ordered to pay costs of $5,000. He was also suspended from working in the industry for a year, and suspended from holding a position of authority (such as chief compliance officer or ultimate designated person) at a firm for five years.
CIRO alleged that Chau and Khamisa failed to disclose the existence of a side agreement that meant that Chau retained control of certain aspects of the firm after it was sold to Khamisa.
“Chau has asserted that the [agreement] gave him control over, among other things, the termination of advisors, compensation from commissions paid to advisors and to Chau, and the [dealer’s] bank account,” the SRO said in its allegations.
Regulators also alleged Chau and Khamisa did not reveal the agreement when regulators asked follow-up questions about the proposed transaction.
As a result, the SRO approved the firm’s sale with incomplete information.
In 2022, TeamMax resigned its membership in the SRO.