An AWC was issued in which Tazhibi was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for two months. Without admitting or denying the findings, Tazhibi consented to the sanctions and to the entry of findings that he made an unsuitable recommendation to retail customers, a recently retired married couple, to invest approximately $135,000 in a non-investment grade, speculative-rated municipal bond intended by the issuer only for sale to institutional buyers. The findings stated that when Tazhibi recommended the bond to them, the customers had an investment profile that included an investment objective of income and growth and a conservative risk tolerance. In addition, although the bond was intended only for sale to approved institutional buyers, the customers were individual retail customers and did not qualify as approved institutional buyers. Tazhibi’s recommendation that the customers invest in the bond was inconsistent with their financial situation and objectives and the intended market for the bond. In light of these factors, Tazhibi lacked a reasonable basis to recommend the bond to the customers and failed to deal fairly with them. The bond was later canceled based on a restructuring agreement with the bondholders. Tazhibi’s member firm paid restitution to the customers to compensate them for their losses.
The suspension is in effect from September 18, 2017, through November 17, 2017. (FINRA Case #2016048911301)