Mehran 'Ron' Tazhibi Sanctioned for Unsuitable Speculative Bond Recommendation to Retired Clients

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FINRA suspended former Citigroup Global Markets, Merrill Lynch, and Fidelity Brokerage Services rep Mehran Tazhibi aka Ron Tazhibi of Northern California for unsuitably recommending that two retirees invest approximately $135,000 in a Thomas Jefferson School of Law (San Diego)-related municipal bond that was inconsistent with the clients' financial situation and investment objectives.

AWC #2016048911301

The findings state that in 2013, while registered with Citigroup in Berkeley, CA, Tazhibi (CRD #5416037) recommended two retail customers purchase about $135,000-worth of California Statewide Communities Development Authority Revenue Bonds.

FINRA found that the bond's offering memorandum disclosed "risks that may not be appropriate for certain investors" and furthermore stated that the bonds "will be sold only to purchasers who are Approved Institutional Buyers," including insurance companies, registered investment companies, benefit plans, and small businesses that invest on a discretionary basis at least $100 million in securities of issuers not affiliated with the bond or related entities.

The report indicates that although Tazhibi purportedly did not have a reasonable basis to believe that this non-investment grade, speculative-rated (credit rating of BB) bond was suitable for his recently-retired clients, whose investment objective was "income and growth" and whose risk tolerance was "conservative," he nonetheless sold it to them. The bond had been slated to mature in October 2032 and pay interest at an annual rate of 7.25%.

In October 2014, the bond was cancelled, and Citigroup paid restitution to Tazhibi's clients in compensation for their losses. A dispute in Tazhibi's BrokerCheck file from 2016 reflects a $100,000 settlement based on allegations of Tazhibi's unsuitable recommendations in the purchase of the Thomas Jefferson Law School bond.

In its settlement, Citigroup wrote, "we continue to deny the allegations alleged in the claim," noting that Tazhibi did not contribute to the settlement.

If you have invested with former Citigroup representative Mehran 'Ron' Tazhibi or with any broker or financial adviser whose unsuitable recommendations to invest in a risky or speculative product not in concert with your less aggressive risk tolerances or investment objectives has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.