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An order that is made regarding a licence holder reflects a situation at a particular point in time. The status of a licence holder can change. Readers should check the current status of a person’s or entity’s licence on the Licensing Link section of FSRA’s website. Readers may also wish to contact the person or entity directly to get additional information or clarification about the events that resulted in the order.

 

Financial Services Regulatory Authority of Ontario

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 19, 21, 22, 38, and 39;

AND IN THE MATTER OF Financial Ties Ltd., Moninder Khudal, Harjot Singh, and Harvinder Gill.


NOTICE OF PROPOSAL TO REVOKE LICENCE and IMPOSE ADMINISTRATIVE PENALTIES

TO:

Financial Ties Ltd.
199 Advance Blvd., Suite 212
Brampton, Ontario L6T 4N2

AND TO: Moninder Khudal

AND TO: Harjot Singh

AND TO: Harvinder Gill

TAKE NOTICE THAT pursuant to sections 19, 21, and 22 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Director, Litigation and Enforcement, (the “Director”) is proposing to revoke the mortgage brokerage licence (licence #10749) issued to Financial Ties Ltd.

AND TAKE NOTICE THAT pursuant to section 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose the following administrative penalties:


  1. On Financial Ties Ltd.:

    1. $10,000 for failing to take reasonable steps to ensure that investments in a mortgage it presented for the consideration of a lender or investor were suitable for the lender or investor, contrary to subsection 24(1) of Ontario Regulation (“O. Reg.”) 188/08; and

    2. $5,000 for failing to maintain complete and accurate records, contrary to subsection 46(1) of O. Reg. 188/08;


  2. On Moninder Khudal:

    1. $5,000 for, as principal broker, failing to take reasonable steps to ensure that Financial Ties Ltd., and each broker and agent authorized to deal or trade in mortgages on its behalf, complied with every requirement established under the Act, contrary to subsection 2(1) of O. Reg. 410/07; and

    2. $5,000 for counselling agents of Financial Ties Ltd. to give or assist in giving false or deceptive information when carrying out the business of dealing in mortgages in Ontario, contrary to subsection 43(2) of the Act;


  3. 3. On Harjot Singh:

    1. $2,000 for causing Financial Ties Ltd. to contravene the Act and regulations, contrary to section 3 of O. Reg. 187/08; and

    2. $1,000 for giving investors false or deceptive information or documents when dealing in mortgages, contrary to subsection 43(2) of the Act;


  4. On Harvinder Gill:

    1. $2,000 for causing Financial Ties Ltd. to contravene the Act and regulations, contrary to section 3 of O. Reg. 187/08; and

    2. $1,000 for giving investors false or deceptive information or documents when dealing in mortgages, contrary to subsection 43(2) of the Act.


Details of these contraventions and reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing.

SI VOUS DÉSIREZ RECEVOIR CET AVIS EN FRANÇAIS, veuillez nous envoyer votre demande par courriel immédiatement à: contactcentre@fsrao.ca.

YOU ARE ENTITLED TO A HEARING BY THE FINANCIAL SERVICES TRIBUNAL (THE “TRIBUNAL”) PURSUANT TO SECTIONS 21(2), 21(3), 39(2) AND 39(5) OF THE ACT. A hearing by the Tribunal about this Notice of Proposal may be requested by completing the enclosed Request for Hearing Form (Form 1) and delivering it to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you. The Request for Hearing Form (Form 1) must be mailed, delivered, faxed or emailed to:

Address:

Financial Services Tribunal
25 Sheppard Avenue West, 7th Floor
Toronto, Ontario
M2N 6S6

Attention: Registrar

Fax: 416-226-7750

Email: contact@fstontario.ca

TAKE NOTICE THAT if you do not deliver a written request for a hearing to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you, orders will be issued as described in this Notice of Proposal. TAKE FURTHER NOTICE of the payment requirements in section 4 of Ontario Regulation 192/08, which state that the penalized person or entity shall pay the penalty no later than thirty (30) days after the person or entity is given notice of the order imposing the penalty, after the matter is finally determined if a hearing is requested or such longer time as may be specified in the order.

For additional copies of the Request for Hearing Form (Form 1), visit the Tribunal’s website at www.fstontario.ca

The hearing before the Tribunal will proceed in accordance with the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal (“Rules”) made under the authority of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended. The Rules are available at the website of the Tribunal: www.fstontario.ca. Alternatively, a copy can be obtained by telephoning the Registrar of the Tribunal at 416-590-7294, or toll free at 1-800-668- 0128 extension 7294.

At a hearing, your character, conduct and/or competence may be in issue. You may be furnished with further and or other particulars, including further or other grounds, to support this proposal.

REASONS FOR PROPOSAL

    I. INTRODUCTION

  1. These are reasons for the proposal by the Director to take the following actions with respect to the sales of syndicated mortgage investments by Financial Ties Ltd. (“Financial Ties”), Moninder Khudal (“Khudal”), Harjot Singh (“Singh”), and Harvinder Gill (“Gill”) to HS, GS/JS, and SS/KS, as described below:

    1. Revoke the mortgage brokerage licence of Financial Ties; and

    2. Impose administrative penalties on:

      1. Financial Ties;

      2. Khudal

      3. Singh; and

      4. Gill.



    2. II. PARTIES

  2. Financial Ties:

    1. Was licensed as a mortgage administrator from October 6, 2010, until it surrendered its licence on May 2, 2011 (licence #12056);

    2. (Has been licensed as a mortgage brokerage since April 22, 2008 (licence #10749); and

    3. Is no longer in operation and filed an application to surrender its mortgage brokerage licence on April 9, 2020.


  3. Khudal:

    1. Was licensed as a broker between July 7, 2008, and March 31, 2020 (licence #M08009338);

    2. Has been designated as the Principal Broker of Financial Ties since it became licensed;

    3. Is the President and sole officer of Financial Ties;

    4. Was the President and sole officer of DIAM Danforth Property Inc. (“DIAM Danforth”); and

    5. Was the sole Director of DIAM Fox Hill Property Inc. (“DIAM Fox Hill”).


  4. Singh was licensed as a mortgage agent (licence #M10001706) between August 5, 2010, and March 31, 2020. Singh was sponsored as a mortgage agent at Financial Ties from August 5, 2010, until he was terminated on August 30, 2019.

  5. Gill was licensed as a mortgage agent (licence #M13000036) between January 9, 2013, and March 31, 2020. Gill was sponsored as a mortgage agent at Financial Ties from January 9, 2013, until she was terminated on August 30, 2019.

    6. III. DEALING IN MORTGAGES

  6. Khudal, Singh, and Gill worked on behalf of Financial Ties to raise funds from the public in respect of investments in syndicated mortgages.

    7. A. The Danforth Project

  7. The “Danforth Project” was a condominium development in Toronto.

  8. Investor funds for the Danforth Project were raised by Financial Ties via syndicated mortgages through DIAM Danforth.

  9. Between August of 2015 and August of 2016, approximately 99 investors invested a total of approximately $5 million in DIAM Danforth.

  10. On May 4, 2020, the Danforth Property was placed into receivership and sold. Investors received a return of approximately 10% of their principal investment.

    11. B. The Fox Hill Project

  11. The “Fox Hill Project” was a townhouse development in Innisfil.

  12. Investor funds for the Fox Hill Project were raised by Financial Ties via syndicated mortgages through DIAM Fox Hill.

  13. Between November of 2016 and August of 2017, approximately 84 investors invested a total of approximately $4.1 million in DIAM Fox Hill.

  14. A third party subsequently assumed the mortgages on the Fox Hill Project and investors received a return of their full principal investment.

    15. Policies and Procedures

  15. 15. Financial Ties had a Policies and Procedures Manual (the “Manual”) that was drafted by Khudal. Among other things, the Manual had policies and procedures related to the suitability of investments in syndicated mortgages for potential investors. The Manual stated that:

    1. Staff were expected to use the Private Lender/Investor Information Form to determine the overall financial profile of the investor and establish his/her general investment parameters;

    2. Key areas to discuss included personal/financial history, prior investment experience, source of funds, administration considerations, transactional maximums and preferences (e.g., maximum LTV, maximum amount, interest rate range, mortgage rank, etc.), and determining whether the investor can and/or should be qualified as a designated class of lender/investor;

    3. This overall profile, including any supporting documentation collected and copies of identification confirmation would establish the investor’s "Lender Info File" which was to be reviewed and updated on an annual basis; and

    4. Prior to presenting an investment in a mortgage to a lender, staff were required to complete the Investment Suitability Form to ensure that the specific investment opportunity was within the investor’s parameters.


  16. However, as set out below, in certain cases agents of Financial Ties failed to conduct any form of suitability analysis when presenting investments opportunities to potential investors.

    17. D. Investors

    (i) Investor HS

  17. HS is an unsophisticated investor with little to no investing experience. He had never previously invested in syndicated mortgages.

  18. Singh met with HS in or about March of 2017. Singh told HS that:

    1. The principal of an investment with Financial Ties would be “safe” and “completely secure”;

    2. The investment had “no risk”;

    3. The investment would be secured by real estate; and

    4. HS would receive a return on his investment of 10%-12%.


  19. Singh did not tell HS that his investment would be pooled with other funds.

  20. Singh admits that he did not conduct any form of suitability analysis for HS. Singh did not use the Private Lender/Investor Information Form, did not discuss HS’s personal/financial history, prior investment experience, source of funds, transactional preferences or maximums, failed to complete a “Lender Info File,” and failed to complete the Investment Suitability Form.

  21. Based on Singh’s representations, HS decided to invest with Financial Ties. In August of 2017, HS invested $24,000 from his RSP in the Fox Hill Project via DIAM Fox Hill.

  22. Singh provided HS with a “Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions” in respect of the Fox Hill Property (the “HS Form 1”).

  23. Singh signed the HS Form 1 as a “Mortgage Broker” even though he was not, in fact, licensed as a broker under the Act. Khudal admits telling Singh that it was acceptable for him to falsely sign in this manner.

  24. HS initially received interest payments in respect of his investment. However, all interest payments stopped in March of 2020. After a third party assumed the mortgages on the Fox Hill Project, HS received a full return of his principal investment.

    25. (ii) Investors GS and JS

  25. GS and JS are husband and wife. They had never previously invested in syndicated mortgages.

  26. In or around 2016, Singh solicited GS and JS to invest with Financial Ties.

  27. Singh admits that he did not conduct any form of suitability analysis for GS and JS. Singh did not use the Private Lender/Investor Information Form, did not discuss GS and JS’s personal/financial history, prior investment experience, source of funds, transactional preferences or maximums, failed to complete a “Lender Info File,” and failed to complete the Investment Suitability Form.

  28. Based on Singh’s representations, GS and JS invested a total of $117,700 with Financial Ties:

    1. GS invested $24,700 from his Retirement Savings Plan (“RSP”) in the Danforth Project via DIAM Danforth;

    2. GS invested $46,500 from his Tax-Free Savings Account (“TFSA”) in the Fox Hill Project via DIAM Fox Hill; and

    3. JS invested $46,500 from her TFSA in the Fox Hill Project via DIAM Fox Hill.


  29. Singh provided GS and JS with “Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions” in respect of the Danforth Property and the Fox Hill Property (the “GS/JS Form 1s”).

  30. Singh signed the GS/JS Form 1s as a “Mortgage Broker” even though he was not, in fact, licensed as a broker under the Act. Khudal admits telling Singh that it was acceptable for him to falsely sign in this manner.

  31. GS and JS ultimately received full repayment of their investment in DIAM Fox Hill. However, after the Danforth Project went into receivership, GS received repayment of only approximately 10% of his $24,700 principal investment in DIAM Danforth.

    32. (iii) Investors SS and KS

  32. SS and KS are husband and wife. They are unsophisticated investors with little to no investing experience. They had never previously invested in syndicated mortgages.

  33. In or around 2016, Gill solicited SS and KS to invest with Financial Ties.

  34. Gill admits that she did not conduct any form of suitability analysis for SS and KS. Singh did not use the Private Lender/Investor Information Form, did not discuss SS and KS’s personal/financial history, prior investment experience, source of funds, transactional preferences or maximums, failed to complete a “Lender Info File,” and failed to complete the Investment Suitability Form.

  35. SS and KS agreed to invest, and in August of 2016 signed paperwork to transfer their funds to Financial Ties:

    1. KS transferred $19,000; and

    2. SS transferred $9,694.


  36. Unknown to SS and KS, their funds had been invested in the Danforth Project via DIAM Danforth.

  37. Gill provided SS and KS with a “Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions” in respect of the Danforth Property (the “SS/KS Form 1”).

  38. Gill signed the SS/KS Form 1 as a “Mortgage Broker” even though she was not, in fact, licensed as a broker under the Act. Khudal admits telling Gill that it was acceptable for her to falsely sign in this manner.

  39. After the Danforth Project went into receivership, SS and KS received repayment of only approximately 10% of their principal investments in DIAM Danforth.

    40. E. Maintenance of Records

  40. Khudal maintained copies of some of Financial Ties’ records, including some forms, mortgage administrative agreements, term sheets, client lists, appraisal reports, bank statements, and financial documents.

  41. However, Khudal admits that in or around 2020 he ceased to pay rent on Financial Ties’ office, and was locked out by its landlord. As Financial Ties’ physical records were stored in its office, Khudal no longer has access to a majority of its records and does not know if they have been kept by the landlord or destroyed.

  42. Khudal also admits that he no longer has access to his Financial Ties email account or Filogix account and, as a result, no longer has access to any of Financial Ties’ electronic records.

    43. F. Current Operations

  43. Financial Ties ceased operations in or around April of 2020.

  44. Financial Ties failed to file Annual Information Returns (“AIRs”) regarding both 2020 and 2021.

    45. IV. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

    FINANCIAL TIES

    A. Failure to Ensure Suitability

  45. Subsection 24(1) of O. Reg. 188/08 provides that a brokerage shall take reasonable steps to ensure that any mortgage or investment in a mortgage that it presents for the consideration of a lender or investor is suitable for the lender or investor having regard to the needs and circumstances of the lender or investor.

  46. The Director is satisfied that Financial Ties contravened subsection 24(1) of O. Reg. 188/08 with respect to HS, GS and JS, and SS and KS. Financial Ties failed to take reasonable steps to ensure that HS, GS and JS, and SS and KS’s investments in syndicated mortgages were suitable for them, contrary to Financial Ties’ own policies and procedures as well as subsection 24(1) of O.Reg 188/08.

    47. B. Failure to Maintain Complete and Accurate Records

  47. Subsection 46(1) of O. Reg. 188/08 provides that a brokerage shall maintain records, including:

    1. Complete and accurate financial records of its licensed activities in Ontario;

    2. Complete and accurate records of every mortgage application, mortgage instrument and mortgage renewal agreement received or arranged by the brokerage;

    3. Complete and accurate records of every other agreement entered into by the brokerage in the course of dealing or trading in mortgages or in the course of mortgage lending; and

    4. Complete and accurate records of all documents or written information given to or obtained from a borrower or prospective borrower, a lender or prospective lender, an investor or prospective investor or any other person or entity pursuant to a requirement established under the Act.


  48. Pursuant to subsections 48(1) to 48(3) of O. Reg. 188/08, a brokerage is required to maintain these records for at least six years.

  49. While Khudal maintained copies of some records, he admits that Financial Ties failed to maintain complete physical and electronic records in respect of its mortgage brokerage activities for the prescribed amount of time. Accordingly, the Director is satisfied that Financial Ties contravened subsection 46(1) of O. Reg. 188/08.

    50. C. Failure to File Annual Information Returns

  50. Section 2 of O. Reg. 193/08 states that on or before March 31 of every year, every brokerage shall give the Chief Executive Officer an AIR in respect of the previous year.

  51. Financial Ties failed to file AIRs in respect of 2020 and 2021.

    52. KHUDAL

    A. Failure to Ensure Brokerage Compliance with the Act

  52. Subsection 2(1) of O. Reg. 410/07 states that the principal broker of a brokerage shall take reasonable steps to ensure that the brokerage, and each broker and agent authorized to deal or trade in mortgages on its behalf, complies with every requirement established under the Act.

  53. Khudal failed to take reasonable steps to ensure that Financial Ties complied with subsections 24(1) with respect to HS, GS and JS, and SS and KS, and 46(1) of O. Reg. 188/08 and section 2 of O. Reg. 193/08. Accordingly, the Director is satisfied that Khudal contravened subsection 2(1) of O. Reg. 410/07.

    54. B. Counselling Agents to Give False or Deceptive Information

  54. Subsection 43(2) of the Act provides that no mortgage broker or agent shall give, assist in giving or induce or counsel another person or entity to give or assist in giving any false or deceptive information or document when dealing in mortgages in Ontario or trading in mortgages in Ontario.

  55. The Director is satisfied that Khudal contravened subsection 43(2) of the Act by counselling Singh and Gill to falsely sign Form 1 documents as a “Mortgage Broker” with respect to HS, GS and JS, and SS and KS even though they were not, in fact, licensed as brokers under the Act.

    56. SINGH

    A. Causing Brokerage to Contravene the Act

  56. Section 3 of O. Reg. 187/08 provides that a mortgage broker or agent shall not do or omit to do anything that might reasonably be expected to result in the brokerage on whose behalf he or she is authorized to deal or trade in mortgages to contravene or fail to comply with a requirement established under the Act.

  57. As agent of Financial Ties, Singh was responsible for any of his actions that resulted in Financial Ties contravening the Act or regulations. As a result of Singh’s failure to conduct any form of suitability analysis for HS, GS or JS, Financial Ties failed to take reasonable steps to ensure that investments in a mortgage it presented for the consideration of HS and GS and JS were suitable for them, contrary to subsection 24(1) of O. Reg. 188/08.

    58. B. Giving Investors False or Deceptive Information or Documents

  58. Subsection 43(2) of the Act provides that no mortgage broker or agent shall give, assist in giving or induce or counsel another person or entity to give or assist in giving any false or deceptive information or document when dealing in mortgages in Ontario or trading in mortgages in Ontario.

  59. The Director is satisfied that Singh contravened subsection 43(2) of the Act by:

    1. Signing the HS Form 1 as a “Mortgage Broker” even though he was not licensed as a broker under the Act; and

    2. Signing the GS/JS Form 1s as a “Mortgage Broker” even though he was not licensed as a broker under the Act.


    60. GILL

    A. Causing Brokerage to Contravene the Act

  60. Section 3 of O. Reg. 187/08 provides that a mortgage broker or agent shall not do or omit to do anything that might reasonably be expected to result in the brokerage on whose behalf he or she is authorized to deal or trade in mortgages to contravene or fail to comply with a requirement established under the Act.

  61. As agent of Financial Ties, Gill was responsible for any of her actions that resulted in Financial Ties contravening the Act or regulations. As a result of Gill’s failure to conduct any form of suitability analysis for SS and KS, Financial Ties failed to take reasonable steps to ensure that investments in a mortgage it presented for the consideration of SS and KS were suitable for them, contrary to subsection 24(1) of O. Reg. 188/08.

    62. B. Giving Investors False or Deceptive Information or Documents

  62. Subsection 43(2) of the Act provides that no mortgage broker or agent shall give, assist in giving or induce or counsel another person or entity to give or assist in giving any false or deceptive information or document when dealing in mortgages in Ontario or trading in mortgages in Ontario.

  63. The Director is satisfied that Gill contravened subsection 43(2) of the Act by signing the SS/KS Form 1 as a “Mortgage Broker” even though she was not licensed as a broker under the Act.

    64. V. GROUNDS FOR REVOCATION OF LICENCE

  64. Paragraph 22(1)(b) of the Act states that the Chief Executive Officer may, by order, revoke a licence without giving notice of his proposal to do so if a licensee does not give the Chief Executive Officer information or documents as required under this Act.

  65. The Director is satisfied that Financial Ties failed to file AIRs in respect of 2020 and 2021, and thus failed to provide information and documents required by section 2 of O. Reg. 193/08.

  66. Furthermore, section 19(1) of the Act states that the Chief Executive Officer may, by order, revoke a licence in any of the circumstances in which he or she is authorized to suspend a licence.

  67. According to section 18(1) of the Act, such circumstances are:

    1. if the licensee ceases to satisfy the prescribed requirements for issuance or renewal, as the case any be, of the licence;

    2. if the Chief Executive Officer believes, on reasonable grounds, that the licensee is no longer suitable to be licensed having regard to the circumstances, if any, prescribed for the purposes of subsection 14(1) or 16(4), as the case may be, and such other matters as the Chief Executive Officer considers appropriate;

    3. if the licensee contravenes or fails to comply with a requirement established under this Act; or

    4. if such other circumstances as may be prescribed.


  68. As set out above, the Director is satisfied that Financial Ties has contravened subsections 24(1) in its dealings with HS, GS/JS, and SS/KS and 46(1) of O.Reg. 188/08. Furthermore, Financial Ties no longer has access to its registered office location, is no longer operating, and has applied to surrender its license.

  69. Accordingly, the Director is satisfied that there are grounds to revoke Financial Ties’ mortgage brokerage licence.

    70. VI. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

  70. The Director is satisfied that imposing administrative penalties on Financial Ties, Khudal, Singh, and Gill under section 39 of the Act will satisfy one or both of the following purposes under section 38(1) of the Act:

    1. To promote compliance with the requirements established under the Act.

    2. To prevent a person or entity from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under the Act.


  71. The Director is satisfied that the following administrative penalties should be imposed:

    1. On Financial Ties:

      1. $10,000 for failing to take reasonable steps to ensure that investments in a mortgage it presented for the consideration of a lender or investor were suitable for the lender or investor, contrary to subsection 24(1) of O. Reg. 188/08; and

      2. $5,000 for failing to maintain complete and accurate records, contrary to subsection 46(1) of O. Reg. 188/08;

    2. On Khudal:

      1. $5,000 as principal broker, for failing to take reasonable steps to ensure that Financial Ties, and each broker and agent authorized to deal or trade in mortgages on its behalf, complied with every requirement established under the Act, contrary to subsection 2(1) of O. Reg. 410/07; and

      2. $5,000 for counselling agents of Financial Ties to give or assist in giving false or deceptive information when carrying out the business of dealing in mortgages in Ontario, contrary to subsection 43(2) of the Act;


    3. On Singh:

      1. $2,000 for causing Financial Ties to contravene the Act and regulations, contrary to section 3 of O. Reg. 187/08; and

      2. $5,000 for counselling agents of Financial Ties to give or assist in giving false or deceptive information when carrying out the business of dealing in mortgages in Ontario, contrary to subsection 43(2) of the Act;


    4. On Gill:

      1. $2,000 for causing Financial Ties to contravene the Act and regulations, contrary to section 3 of O. Reg. 187/08; and

      2. $1,000 for giving investors false or deceptive information or documents when dealing in mortgages, contrary to subsection 43(2) of the Act.



  72. In determining the amount of the administrative penalties, the Director has considered the following criteria as required by section 3 of Ontario Regulation 192/08:

    1. The degree to which the contravention or failure was intentional, reckless or negligent.

    2. The extent of the harm or potential harm to others resulting from the contravention or failure.

    3. The extent to which the person or entity tried to mitigate any loss or take other remedial action.

    4. The extent to which the person or entity derived or reasonably might have expected to derive, directly or indirectly, any economic benefit from the contravention or failure.

    5. Any other contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation of Ontario or of any jurisdiction during the preceding five years by the person or entity.


  73. In respect of the first criterion, the Director is satisfied that Financial Ties, Khudal, Singh, and Gill’s conduct in respect of each contravention was intentional. The contraventions were part of established business practices and consistent over three transactions for five clients.

  74. In respect of the second criterion, the Director is satisfied that the actual and potential harm to others was significant. Investors were placed in high risk syndicated mortgage investments without appropriate review and analysis of the suitability of the investment. GS, SS and KS lost approximately 90% of their principal investment in the Danforth Project.

  75. In respect of the third criterion, the Director is unaware of any efforts by Financial Ties, Khudal, Singh, or Gill to mitigate any loss or take other remedial action.

  76. In respect of the fourth criterion, Financial Ties, Khudal, Singh, and Gill derived economic benefit from their contraventions of the Act. For each investment in syndicated mortgages:

    1. Singh and Gill earned a sales commission of 3% of the principal amount of each investment, and a recurring fee of 1.5% of the principal per year thereafter; and

    2. Financial Ties charged total brokerage fees of approximately 10%-12% of each investment.


  77. In respect of the fifth criterion, the Director is unaware of any contraventions or failures to comply with the Act or its regulations in the preceding five years by Financial Ties, Khudal, Singh, or Gill.

  78. The Director is satisfied, having regarded all the circumstances, that the proposed amount of the penalties are not punitive in nature, and the amount is consistent with one or both purposes of section 38 of the Act.

  79. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, April 20, 2022

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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