Ontario regulator detailed a years-long pattern of misconduct tied to a failed Northern Ontario rental portfolio.
Regulators in Ontario set out one of their toughest recent enforcement moves in the mortgage space, imposing $600,000 in administrative penalties on former broker Claire Drage after finding she orchestrated a “prolonged and extensive pattern of misconduct” that left investors facing major losses.
According to the Financial Services Regulatory Authority of Ontario (FSRA), Drage brokered “hundreds of mortgages and other loans” for a group of related real estate companies known as the Balboa Companies, raising “over $100 million dollars from the investing public.”
Those firms, which assembled a large portfolio of rental properties across Northern Ontario, became insolvent and obtained protection under the Companies’ Creditors Arrangement Act in January 2024, exposing investors “to serious loss,” FSRA said.
“Consumer protection is paramount and licensed mortgage brokers must comply with regulatory requirements,” said Elissa Sinha, FSRA’s director of enforcement.
“FSRA will not hesitate to sanction licensees who expose consumers to harm.”
FSRA found that while dealing in mortgages, Drage failed to disclose material risks and conflicts, provided “generic” boilerplate warnings instead of specific credit concerns, and routinely allowed inflated or unsupported valuations to be shown to investors, resulting in reported loan‑to‑value ratios that were materially understated.
The regulator said she failed to take reasonable steps to ensure mortgage suitability for either investors or the Balboa borrowers and did not correct “inaccuracies in the mortgage applications,” including significant under‑reporting of property holdings.
In addition to raising capital through secured mortgages, Drage’s education and consulting firm, The Lion’s Share Group, used unsecured promissory notes to funnel more investor money into Balboa‑linked entities.
Court filings in the insolvency proceedings have described the Balboa portfolio’s rapid growth, heavy leverage and subsequent collapse as creditors now move to take control of hundreds of properties.
FSRA said Drage derived “significant economic benefit” from the activity and did not take meaningful steps to mitigate investors’ losses.
The order followed a January 2026 notice of proposal; Drage did not request a hearing before the Financial Services Tribunal, allowing the penalties to be imposed.
Given the current public record, the Drage order appears to be the largest single set of administrative monetary penalties FSRA has imposed so far this year.
The regulator recently issued a notice of proposal against mortgage broker Jennifer Iachelli and level 2 mortgage agent Nicole Geldart. The action stemmed from a series of investment deals that allegedly left a business partner solely responsible for losses on three properties.
FSRA proposed an administrative penalty of $50,000 for Iachelli and $55,000 for Geldart. The regulator also sought to add 24‑month supervisory conditions to Geldart’s licence.
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