← Broker database 2021-11-02
Abdul Matin Rahmani Barred for Undisclosed Outside Business and Providing False Information
According to FINRA, Abdul Matin Rahmani was barred from association with any FINRA member in all capacities for engaging in undisclosed outside business activities involving pre-IPO securities sales, providing false information to his firm, and failing to cooperate with FINRA's investigation.
Rahmani engaged in outside business activities through an entity that marketed and sold shares of pre-initial public offering companies to investors without providing prior written notice to his firm. He acted as an employee or independent contractor for the entity by soliciting prospective investors, meeting with investors, using an entity email account, and using a debit card to withdraw funds from a bank account associated with the entity. When questioned by the firm, Rahmani falsely stated that he was not involved with the entity.
The violations became more serious when Rahmani failed to cooperate with FINRA's investigation. He provided incomplete information in response to FINRA's requests, failing to disclose an email address he used with the entity's domain name and failing to disclose bank accounts he opened around the same time the entity was formed. During on-the-record testimony, Rahmani compounded his violations by providing false and misleading information. He testified that he had no involvement with the entity and never used an email address associated with it, despite having already produced to FINRA emails sent to and from that very email address. He also falsely stated that he had closed multiple bank accounts that he initially failed to disclose.
After his testimony, FINRA requested information and documents about the bank accounts Rahmani had opened. He failed to provide complete information for two accounts and failed to provide any information whatsoever for the remaining accounts.
Failing to cooperate with FINRA investigations is treated as a serious violation because FINRA's ability to protect investors depends on its ability to thoroughly investigate potential misconduct. When registered persons provide false testimony, conceal email accounts, hide bank accounts, and refuse to produce requested documents, they obstruct FINRA's regulatory function.
Investors should understand that registered representatives must disclose all outside business activities to their firms, especially those involving securities. The requirement exists so firms can supervise their representatives' activities and identify potential conflicts of interest. This case also demonstrates that attempting to cover up misconduct and lying to regulators results in more severe sanctions than the underlying violation might have warranted.