Ontario regulator takes action against compliance failures, unlicensed activities
The Financial Services Regulatory Authority of Ontario (FSRA) has imposed $430,000 in administrative penalties and revoked a brokerage licence following a series of compliance failures and unlicensed activities involving multiple industry participants.
Penalties and revoked licences follow investigation into unsuitable, high-fee mortgages
FSRA’s enforcement actions targeted Kim Thanh Do (Kim Do), Gyula “George” “Julien” Zambok (Zambok), 5015977 Ontario Inc. (501 Ontario), Bruce Rene Kotis (Kotis), and Myriad Mortgage.
The regulator also revoked the mortgage brokerage licence of 2382314 Ontario Inc., operating as Mortgage Bridge Canada, and imposed conditions on the licence of broker Kasturi Chatterjee.
The regulator found that Kim Do, a former licensed agent, “dealt in mortgages outside her authorizing brokerage, received remuneration from unauthorized sources, facilitated unlicensed activities, and failed to provide documents and information under oath,” according to FSRA’s order. She was fined $140,000.
Zambok, who was never licensed, was penalized $130,000 for “dealing in mortgages for remuneration without a licence and failing to provide documents and information under oath.”
501 Ontario, also unlicensed, was fined $50,000 for acting as a mortgage lender without a brokerage licence and failing to provide required documents.
Kotis, as principal broker of Myriad Mortgage, was fined $30,000 for failing to ensure compliance at his brokerage. Myriad Mortgage itself was penalized $80,000 for failing to ensure mortgage suitability, obtain independent legal advice for reverse mortgages, disclose conflicts of interest, and maintain accurate records.
FSRA’s investigation revealed that vulnerable clients, many on fixed incomes, were targeted with complex, high-fee mortgages.
“The mortgages were not suitable for the affected clients and they suffered financial harm. Many clients who fully owned their homes a few years ago are now in significant debt and are at risk of losing them,” FSRA said.
Settlements and ongoing enforcement actions
FSRA issued orders against Mortgage Bridge and Chatterjee following a settlement. Chatterjee agreed to resign as principal broker and not serve in that role again. Mortgage Bridge’s brokerage licence was revoked.
The regulator also proposed penalties of $30,000 against Rebecca Thien Kim Nguyen Do and $80,000 against Jordan Ovejas for similar contraventions. Both have requested hearings before the Financial Services Tribunal.
Broader implications for compliance and consumer protection
These enforcement actions underscore FSRA’s focus on protecting vulnerable consumers and ensuring mortgage suitability. The regulator highlighted the importance of principal brokers taking reasonable steps to oversee agents and maintain proper records.
Last week, FSRA also hit two former mortgage agents with penalties totalling $230k over fraud and misconduct.
FSRA’s recent actions align with a broader trend of heightened scrutiny on mortgage suitability and disclosure practices, particularly when dealing with seniors and other at-risk borrowers.
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