Broker fined for not disclosing disciplinary history

A Manitoba broker has been fined $500 and ordered to pay investigation costs of $2,000 for failing to disclose to the province’s broker regulator that he had previously been the subject of a disciplinary investigation by B.C.’s broker regulator.

“The licensee falsely declared on his licensing applications, dated May 5, 2020, May 12, 2021, and July 28, 2021, that he had not been under investigation by any regulatory or licensing authority; when in fact he had received notice from the [B.C.] regulator on June 21, 2019 that he was under investigation, and in April 2021 he was aware of the regulator’s hearing on May 4, 2021,” the Insurance Council of Manitoba (ICM) ruled in a decision released late June.

Through his lawyer, the broker, Barzin Assadi, explained the false declarations were based on a misunderstanding of the questions on the licensing application. He admitted to a careless review of his answers before he submitted them to Manitoba’s broker council.

“Mr. Assadi failed to disclose the [B.C. regulator’s] investigation on four separate occasions: Aug. 20, 2019, May 5, 2020, May 12, 2021, and July 28, 2021,” the broker’s lawyer noted in a letter to the Insurance Council of Manitoba. “Mr. Assadi has acknowledged his obvious carelessness in his review and completion of the questions on those occasions and that he accepts responsibility for his errors….

“Mr. Assadi unfortunately initially misread the question on Aug. 20, 2019, as enquiring only as to past and completed investigations and disciplinary matters (rather than ongoing investigations) and then unfortunately compounded his initial mistake by providing the same answer on each subsequent occasion without re-reading the question given his relevant circumstances had not changed since August 2019.

“Mr. Assadi acknowledges that he ought to have more carefully reviewed the ICM renewal application questions on each occasion.”

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On Sept. 17, 2021, the Insurance Council of B.C. published a final decision that ordered Assadi to pay a fine of $2,000 and investigation costs of $2,125 over a breach of the B.C. regulator’s code for managing client information.

In that matter, Assadi had moved from one brokerage to another, and the former employer expressed concern Assadi “had copied confidential and proprietary information from the former employer’s computer system onto a USB drive,” as the Insurance Council of B.C.’s decision ruled.

B.C.’s regulator noted that, through counsel, the licensee had turned the USB drive over to the former employer. In addition, the current employer isolated a folder on its computer system that contained a copy of the files from the USB drive, restricting access to the folder according to a procedure approved by the former employer. Finally, Assadi and his current employer agreed to a forensic IT audit of the licensee’s home computer and the current employer’s computing system.

In the B.C. matter, Assadi’s lawyer observed that “the USB drive had two primary functions: to store personal documents and information necessary for the licensee’s non-work business and personal computing, and as a backup for his work computer.”

The lawyer noted Assadi “did not contact the former employer’s clients on behalf of the current employer while employed by the former employer.”

B.C. regulator raised three issues with how Assadi managed the client information.

Assadi stored client information on his personal device, “notwithstanding the implied expectation of clients that the information would only be used for authorized business purposes.”
The broker co-mingled client information with his personal information and documents
There was a lack of passwords or other reasonable safeguards to protect the client information on the personal USB drive from unauthorized access by others.

Assadi admitted that he could have managed the information better and suggested he undergo training and education on client information privacy. The Insurance Council of B.C. said Assadi’s cooperation in the investigation was a mitigating factor, although it found a fine was merited for the “carelessness” in which the way Assadi managed client data.

Feature image courtesy of iStock.com/zoomstudio