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 and 21;

AND IN THE MATTER OF Reza Nezami-Nia.

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I – INTRODUCTION

Reza Nezami-Nia (“Nezami-Nia”) is licensed as a mortgage broker under the Act (licence #M08003821).
On March 22, 2023, the Director, Litigation and Enforcement (the “Director”), by delegated authority from the Chief Executive Officer (“CEO”) of the Financial Services Regulatory Authority of Ontario (“FSRA”), issued a Notice of Proposal in respect of Nezami-Nia (the “NOP”). On March 22, 2023, the Delegate also issued an Interim Order suspending the licence issued to Nezami-Nia.
Nezami-Nia disputed the allegations and, on or about April 3, 2023, requested a hearing before the Financial Services Tribunal (the “Tribunal”) in respect of the NOP.
Nezami-Nia and the Director, by delegated authority from the CEO, (collectively the “Parties”) wish to resolve this matter on consent and without a hearing before the Tribunal.

PART II – AGREED FACTS

First Swiss Mortgage Corp. (“First Swiss”) was a licensed mortgage brokerage (licence #10550) and a licensed mortgage administrator (licence #11956).
On May 4, 2023, FSRA revoked the First Swiss mortgage brokerage and mortgage administrator licences.
Nezami-Nia was the principal broker of First Swiss. Nezami-Nia was the sole director of First Swiss.
In regulatory filings with FSRA, First Swiss listed the address for its principal place of business as 5775 Yonge Street, Suite 525, Toronto, Ontario.
In March 2023, First Swiss operated primarily out of 7191 Yonge Street.
First Swiss failed to notify FSRA of the change to the address of its principal place of business.
On March 15, 2023, First Swiss filed for bankruptcy.
The accounts held by First Swiss became part of the estate of the bankrupt.
Following March 15, 2023, First Swiss was unable to maintain a financial guarantee of $25,000 in unimpaired working capital as required by section 28 of Ontario Regulation 189/08.
As the sole director of First Swiss and its principal broker, Nezami-Nia failed to take reasonable steps to ensure that First Swiss complied with all requirements under the Act.
During settlement discussions, Nezami-Nia offered to surrender his mortgage broker licence. Nezami-Nia’s licence surrender was not acceptable to FSRA. Nezami-Nia consents to the revocation of his mortgage broker licence.

PART III – NON-COMPLIANCE WITH THE ACT

By engaging in the conduct described above in Part II, Nezami-Nia admits and acknowledges that they breached the Act as follows:
1. Failing to take reasonable steps to ensure that the mortgage brokerage (First Swiss) complies with every requirement established under the Act, contrary to subsection 2(1) of Ontario Regulation 410/07; and
2. As a director of First Swiss, failing to take reasonable steps to ensure that First Swiss complies with every requirement established under the Act, as required by subsection 52(2) of the Act.
As a result of this non-compliance, Nezami-Nia admits that they are not suitable to be licensed under the Act, as contemplated by subsection 19(1) of the Act and section 10 of Ontario Regulation 409/07.

PART IV – TERMS OF SETTLEMENT

Nezami-Nia admits the facts contained in Part II of these Minutes.
Nezami-Nia acknowledges and agrees that they have been given the opportunity to seek independent legal advice and have done so (or have waived the right to do so) and are entering into these Minutes of Settlement and Undertaking (“Minutes”) voluntarily, understanding the consequences of doing so.
Nezami-Nia acknowledges that these Minutes are an undertaking within the meaning of the Act, and that failure to comply may result in immediate regulatory action including, but not limited to, the issuance of a Notice of Proposal to revoke the licence, a Notice of Proposal to impose an administrative penalty, or a prosecution under the Provincial Offences Act.

(a) Issuance of Order

Nezami-Nia acknowledges that, upon execution of these Minutes by both Parties, the order attached as Schedule “A” to these Minutes (the “Order”) will be issued.

(b) Process for Execution of Settlement

Nezami-Nia acknowledges that these Minutes are not binding on the Director until signed by the Director.
These Minutes may be executed in counterparts, and may be executed and delivered by facsimile or e-mail, and all such counterparts and facsimiles or e-mails, as applicable, shall together constitute one and the same agreement.
Upon receiving an executed copy of these Minutes from FSRA, Nezami-Nia will withdraw their Request for Hearing (Form 1) in respect of the NOP before the Tribunal by completing a Withdrawal/Discontinuance (Form 5) and filing it with the Registrar at the Tribunal within two (2) business days.
Upon confirmation from the Tribunal that the Request for Hearing has been withdrawn and the hearing has been cancelled, the Parties agree that the Director will issue an Order in the form attached as Schedule “A” to these Minutes.
The Parties accept and understand that these Minutes and any rights within the Minutes shall enure to the Parties and to any successors or assigns of the Parties.

(c) Disclosure of Minutes and Order

The Parties will keep the terms of these Minutes and the Order confidential until the Order is issued, except that: (i) The Director shall be permitted to disclose the Minutes and the Order within FSRA; and (ii) The Parties shall be permitted to inform the Financial Services Tribunal.
If either of the Parties do not sign these Minutes or the Director does not issue the Order:
1. These Minutes, the Order, and all related discussions and negotiations will be without prejudice to FSRA and Nezami-Nia; and
2. FSRA and Nezami-Nia will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the NOP. Any proceedings, remedies and challenges will not be affected by these Minutes, the Order, or any related discussions or negotiations.
Upon issuance of the Order:
1. Nezami-Nia agrees that these Minutes and the Order form part of their administrative record for the purposes of any future licensing decision or as an aggravating factor in respect of a future administrative penalty or prosecution against them or any affiliated entities;
2. Nezami-Nia acknowledges that these Minutes and the Order are public and will be published by FSRA on its public website (or that of its successor) along with a press release that summarizes these Minutes and the Order; and
3. The Parties agree not to make representations to any member of the public or media or in a public forum that are inconsistent with these Minutes or the Order.

(d) Further Proceedings

Whether or not the Order is issued, Nezami-Nia will not use, in any proceeding, these Minutes or the negotiation or process of approval of these Minutes as the basis for any attack on FSRA’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may be available.
Upon issuance of the Order:
1. Nezami-Nia waives all rights to a hearing before the Tribunal regarding the NOP;
2. Nezami-Nia waives all rights to a judicial review or appeal of the Order;
3. The Director agrees that FSRA will not take any further proceedings against Nezami-Nia arising solely from the facts contained in Part II of these Minutes, unless facts not disclosed by Nezami-Nia come to the attention of FSRA that are materially different from those contained in Part II of these Minutes or Nezami-Nia fails to comply with any term in the Order; and
4. Nezami-Nia agrees that should they fail to comply with any term in these Minutes or the Order, FSRA is entitled to bring any proceedings available to it.
For greater clarity, these Minutes resolve the contraventions identified herein, namely that Nezami-Nia failed to take reasonable steps to ensure that First Swiss notified FSRA of a change to the address of its principal place of business and failed to take reasonable steps to ensure that First Swiss maintained a financial guarantee in an amount equal to $25,000 upon its assignment into bankruptcy. These Minutes are without prejudice to any other regulatory action FSRA may take regarding Nezami-Nia and any defence that Nezami-Nia may rely upon.

DATED at Toronto, Ontario, this 30th day of January, 2024

Original signed by

Reza Nezami-Nia

DATED at Toronto, Ontario, this 30th day of January, 2024

Original signed by

Robert Karrass, Counsel for Reza Nezami-Nia
Name of Witness

DATED at Toronto, Ontario, February 2, 2024

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

APPENDIX A

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 and 21;

AND IN THE MATTER OF Reza Nezami-Nia (“Nezami-Nia”)

ORDER REVOKING LICENCE

Nezami-Nia is licensed as a mortgage broker licence (licence #M08003821) under the Act.

On March 22, 2023, 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”) issued a Notice of Proposal to revoke the mortgage broker licence issued to Nezami-Nia. The Director also issued an Interim Order suspending the licence issued to Nezami Nia.

A Request for Hearing (Form 1), dated April 3, 2023, was delivered to the Financial Services Tribunal (the “Tribunal”) in accordance with section 21(3) of the Act respecting the Notice of Proposal.

On [date], Nezami-Nia withdrew the Request for Hearing, and, on [date], the Tribunal closed its file in respect of this matter. Therefore, pursuant to section 21(7) of the Act, the Director makes the following order.

ORDER

The mortgage broker licence (licence # M08003821) issued to Reza Nezami-Nia is hereby revoked, for the reasons set out in the Minutes of Settlement.

DATED at Toronto, Ontario, , 2023

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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