“Unauthorized” Investment Group Sues Online Activists

A credit union with close ties to the judiciary has lodged legal cases against three people for “spreading rumors against financial institutes in cyberspace.”

Following the October 2014 announcement that Mizan Financial and Credit Institute had been operating without authorization, the three individuals launched an online campaign and distributed leaflets urging investors to withdraw funds from the investment group. Directors of the company responded by bringing lawsuits against the three people in mid-February, accusing them of “creating psychological confusion” among its clients.

The arrests come at a time when several government figures have been accused of corruption and a number of financial institutes are under scrutiny for financial impropriety and unauthorized operations.

In October 2014, the Iranian Central Bank reported that Mizan, which handles the investments of thousands of Ministry of Justice employees in the province of Khorasan, was not authorized and had been operating outside the supervision of the bank. Among its clients are local judges.

According to Khorasan Newspaper, authorities arrested the three people soon after the cases were filed at courts in Kamyab and Qodusi in Mashhad province. The cases were referred to the Iranian Cyber Police (FATA) and the Criminal Investigation Department of the province of Razavi Khorasan.

“After a few days of the investigation,” the paper reported, “it was revealed that the rumors had begun in one of the towns near the border of the province, and from there it spread to other cities, and particularly to Mashhad. Three people were then arrested, including one woman.” The charge of “spreading rumors against financial institutes in cyberspace” is relatively new.

“One of the accused has confessed that he received money to spread rumors and publish pamphlets calling for clients to protest outside branches of Mizan Financial and Credit Institute,” the report said.

It also said that four other people were being sought in connection with the scandal.

Mizan Financial and Credit Institute was founded in February 2000. At the time, it served the financial needs of 3,000 judges and employees at the Ministry of Justice in Khorasan and had a branch in Mashhad. Over the years it has expanded, eventually setting up 107 branches in Razavi Khorasan province, as well as in northern and southern Khorasan and Tehran.