IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29, as amended (the “Act”), in particular sections 16, 21, 38 and 39;

AND IN THE MATTER OF Masoud Asnafi, Rohan De Silva, Real Mortgage Associates Inc., and Approved Mortgage Brokers Inc.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE AND
TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Masoud Asnafi

AND TO: Rohan (Ron) De Silva

AND TO:
Real Mortgage Associates Inc.
578 Upper James
Hamilton, Ontario, L9C 2Y6

AND TO: Approved Mortgage Brokers Inc.

TAKE NOTICE THAT pursuant to sections 16 and 21 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 refuse to renew the mortgage broker licence (# M12001788) issued to Masoud Asnafi (“Asnafi”).

AND TAKE NOTICE THAT pursuant to sections 38 and 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose twenty-one (21) administrative penalties in the total amount of $110,000 on Asnafi:

nineteen (19) administrative penalties of $5,000 each, in the total amount of $95,000, for contravening section 43(2) of the Act by giving false or deceptive information and documents when dealing in mortgages in Ontario;
an administrative penalty of $10,000 for contravening section 3 of Ontario Regulation 187/08 by doing or omitting to do anything that might reasonably be expected to result in his brokerage failing to comply with a requirement under the Act; and
an administrative penalty of $5,000 for contravening section 9 of Ontario Regulation 187/08 by including false, misleading or deceptive information in his public relations materials.

AND TAKE NOTICE THAT pursuant to sections 38 and 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose two (2) administrative penalties of $10,000 each, in the total amount of $20,000, on Rohan (Ron) De Silva (“De Silva”) for contravening section 2 of Ontario Regulation 410/07 by not taking reasonable steps to ensure the brokerage and each broker or agent complies with requirements established under the Act.

AND TAKE NOTICE THAT pursuant to sections 38 and 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose an administrative penalty in the amount of $20,000 on Real Mortgage Associates Inc. (“RMA”) for contravening section 46 of Ontario Regulation 188/08 by not maintaining complete and accurate records of all documents or written information obtained from a borrower.

AND TAKE NOTICE THAT pursuant to sections 38 and 39 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose an administrative penalty in the amount of $10,000 on Approved Mortgage Brokers Inc. (“AMB”) for contravening section 11 of the Act by using a description that might reasonably lead to the belief that AMB is a mortgage brokerage or broker.

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.

Address:
Financial Services Tribunal
25 Sheppard Avenue W, Suite 100
Toronto, ON 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

Masoud Asnafi (“Asnafi”) is a mortgage broker who submitted false or deceptive information to a lender in respect of 19 mortgage applications.
Rohan De Silva (“De Silva”) is a mortgage broker. He is the principal broker of Real Mortgage Associates Inc. (“RMA”), a mortgage brokerage licensed under the Act (licence #10464). Asnafi was a broker with RMA when the false or deceptive information was submitted to lenders.
De Silva failed to take reasonable steps to prevent Asnafi from submitting the false or deceptive information to the lender, despite indicators, like incomplete mortgage fraud checklists, that the applications were at higher risk for false or deceptive information.
Further, RMA failed to maintain complete records of all documents or written information given to or obtained from borrowers in relation to the 19 mortgage applications. As the principal broker of RMA, De Silva is required to take reasonable steps to ensure that RMA complies with the Act and its regulations, including record keeping obligations.
Despite never having been a licensed mortgage brokerage, Approved Mortgage Brokers Inc. (“AMB”) has signage on its office that suggests that it is a mortgage broker or brokerage. Asnafi referred to AMB in his email signature, even after being warned by staff from the Financial Services Regulatory Authority of Ontario (“FSRA”) in 2020 that advertising under the AMB name violated the Act.

II. BACKGROUND

A. Parties

Asnafi was licensed under the Act (licence #M12001788) from September 20, 2012, until the expiry of his licence on March 31, 2024. On March 22, 2024, before the expiry of his licence, Asnafi applied to renew his mortgage broker licence.
Asnafi has worked for RMA since December 10, 2013.
De Silva is licensed under the Act (licence #M08011187) as a mortgage broker. He has been the principal broker of RMA since 2015.
AMB is a Canadian corporation. Asnafi is the Chief Officer or Manager of AMB and is its sole director.

B. Asnafi & AMB Complaint History

In 2018, Asnafi was the subject of a complaint to the Financial Services Commission of Ontario (“FSCO”), FSRA’s predecessor. A compliance officer at FSCO notified De Silva by telephone that it had received the complaint. The compliance officer told De Silva that the complaint alleged that Asnafi had offered to produce fake documents for the complainant in support of a mortgage.
On May 8, 2020, FSRA received a complaint regarding the advertising of AMB. The complaint noted that Asnafi’s marketing of AMB could cause confusion as there is a FSRA-licensed mortgage brokerage with a similar name.
On June 5, 2020, FSRA notified De Silva of the print and online advertisements implying AMB was licensed as a mortgage brokerage. The online advertisements included the AMB website and social media materials.
The AMB website was subsequently updated to remove references to it as a brokerage. The AMB logo was removed and replaced with the RMA logo.
On June 18, 2020, FSRA issued a warning letter to Asnafi, copying De Silva (“Warning Letter”). The Warning Letter reminded Asnafi of the rules regarding accurate public relations materials.

C. Asnafi Submitted Altered or Fabricated Documents

Between May 12, 2021 and April 28, 2022, Asnafi submitted 19 mortgage applications (the “Mortgage Applications”) to a lender (the “Lender”) which contained altered or fabricated documents.
The altered or fabricated documents included bank statements, master business licences, and income tax documents. Some of the Mortgage Applications contained several different altered or fabricated documents.
With one exception, the Mortgage Applications were funded by the Lender. Almost $12 million was advanced in connection with these 18 mortgages.
The Lender paid Asnafi commissions of $123,139.45 through RMA in connection with the funded Mortgage Applications. Asnafi paid another agent $3,637.50 for their work on one of the transactions.
The Lender terminated its business relationship with the Asnafi on April 28, 2022.

C.1 Altered and Fabricated Bank Account Statements

Asnafi submitted altered or fabricated bank account statements to the Lender in support of 17 Mortgage Applications.
Across these Mortgage Applications, the account balances were overstated in 32 instances. The overstated balances varied between $8.00 and $393,612, with an average overstatement of $105,690.
For instance, in one application, Asnafi submitted bank statements to the Lender representing that the client held three accounts with a combined balance of $754,324. In fact, the accounts had a combined balance of $1,904.
In the case of the balance that was overstated by just $8.00 the period of time that the funds were shown to be in the account was overstated. The majority of the funds, $395,000 out of the total $400,636.94, had been in the account for just over a month, while the altered or fabricated statements showed the funds had been in the account for more than three months.
In one Mortgage Application, the bank account did not exist.

C.2 Fabricated Master Business Licences

Asnafi submitted falsified master business licence certificates to the Lender in support of nine Mortgage Applications.
The companies purportedly represented by the certificates have never existed.

C.3 Altered and Fabricated Income Tax Documents

Asnafi submitted altered or fabricated income tax documents to the Lender in support of three Mortgage Applications, including one which overstated the prospective borrowers’ annual income by approximately $100,000.

D. Asnafi Advertised an Unlicensed Mortgage Brokerage

Asnafi incorporated AMB with the goal of advertising to generate mortgage leads. The registered head office and principal place of business of AMB is located on Finch Avenue West in Toronto, Ontario (“the Finch Office”).
The Finch Office prominently features an exterior sign advertising AMB. As of May 27, 2024, the sign included the AMB name and logo, and a reference to the AMB website that was the subject of the 2020 complaint and Warning Letter.
While working as a mortgage broker for RMA, Asnafi used the Finch Office to meet with clients. Other mortgage agents also worked out of the Finch Office.
While working as a broker for RMA, Asnafi used a Gmail email account (the “Gmail Account”). In 2021 and 2022, the email signature for the Gmail Account indicated “Approved Mortgage Brokers/RMA.”
Asnafi used the Gmail Account when corresponding with mortgage borrowers and lenders while working at RMA in 2021 and 2022. Asnafi’s email signature no longer includes reference to AMB.
At least as recently as July 2022, AMB continued to operate its website which stated “We are a FSRA licensed mortgage broker, under the RMA Mortgages umbrella” and provided the Finch Office address.
The AMB website is no longer accessible.

E. Missing Records

During its investigation, FSRA requested copies of documents and correspondence from Asnafi in connection with the mortgage applications under review.
When asked to provide emails and attached documents related to 23 files, Asnafi provided them for only nine. He informed FSRA that he had no further client records.
Asnafi provided copies of bank statements for only two of 17 client files. Asnafi provided no copies of the master business licences requested by FSRA.
RMA has no access to the Gmail Account and no separate records of communications between Asnafi and clients. When asked to provide communications related to specific files, RMA obtained incomplete communications by requesting them from Asnafi.

F. Mortgage Fraud Checklist

As principal broker, De Silva is responsible for taking reasonable steps to ensure RMA’s compliance with the Act. Two compliance personnel at RMA report to De Silva.
De Silva told FSRA that the RMA-required “Mortgage Fraud Checklist” is the main tool used by RMA for fraud prevention. De Silva confirmed that the version used by Asnafi in the 19 Mortgage Applications remains in use at the brokerage. The Mortgage Fraud Checklist is required in every application package at RMA.
The Mortgage Fraud Checklist contains nine checkboxes, requiring checks on items like title, address, phone number, employer and identification.
A text area below the checkboxes provides space for the agent to detail any inconsistencies.
Asnafi failed to fully complete the Mortgage Fraud Checklist in all 18 funded Mortgage Applications. Beyond reviewing photo identification, Asnafi did not consistently document completing any other required fraud prevention steps.

III. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. False or Deceptive Information when Dealing in Mortgages

Section 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. Such conduct is prohibited whether or not the agent is aware that the information is false or deceptive.
Section 2 of Ontario Regulation 410/07 provides that the principal broker shall take reasonable steps to ensure that each broker and agent authorized to deal or trade in mortgages on its behalf, complies with every requirement established under the Act. This includes section 43(2) of the Act.

A.1 Asnafi

Between May 12, 2021, and April 28, 2022, Asnafi submitted altered or fabricated documents for the 19 Mortgage Applications submitted to the Lender.
Asnafi did not take reasonable steps to verify the authenticity of the documents.
The Director is satisfied that Asnafi gave false or deceptive documents to the Lender on 19 occasions when dealing in mortgages contrary to section 43(2) of the Act.

A.2 De Silva

As principal broker of RMA, De Silva was required to take reasonable steps to ensure brokers and agents operating through his brokerage complied with the Act.
De Silva had been notified by FSCO of a complaint alleging Asnafi had offered to produce false documents for a prospective borrower.
However, De Silva failed to ensure that the fraud prevention steps listed in the Mortgage Fraud Checklist were completed and documented by Asnafi, or take other steps to ensure Asnafi complied with the Act.
This failure to take reasonable steps to ensure compliance allowed Asnafi to submit altered or fabricated documents in support of the Mortgage Applications to the Lender through RMA.
The Director is satisfied that De Silva failed to take the reasonable steps to ensure Asnafi complied with the Act, contrary to section 2 of Ontario Regulation 410/07.

B. Failing to Maintain Brokerage Records

Section 46(1) of Ontario Regulation 188/08 provides that a mortgage brokerage shall maintain records, including:
1. complete and accurate records of every mortgage application, mortgage instrument, and mortgage renewal agreement received or arranged by the brokerage; and
2. 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.
Section 3 of Ontario Regulation 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.
Section 2 of Ontario Regulation 410/07 provides that the principal broker shall take reasonable steps to ensure that the brokerage complies with every requirement established under the Act.

B.1 RMA

When FSRA requested communications between Asnafi and 23 clients, RMA was unable to provide these records. RMA was only able to obtain incomplete records from Asnafi. As a result, RMA failed to maintain complete and accurate information related to the borrowers.
The Director is satisfied that RMA failed to maintain complete and accurate records of all written information or documents given by borrowers, in contravention of section 46(1) of Ontario Regulation 188/08.

B.2 Asnafi

Asnafi’s record-keeping practices resulted in RMA failing to comply with the record-keeping requirements of Ontario Regulation 188/08.
The Director is satisfied that Asnafi’s actions caused RMA to contravene the Act. Therefore, Asnafi has contravened section 3 of Ontario Regulation 187/08, which prohibits brokers from doing anything that would cause their brokerage to contravene the Act.

B.3 De Silva

De Silva, as principal broker of RMA, was required to take reasonable steps to ensure that RMA complied with its record-keeping obligations under s. 46(1) of Ontario Regulation 188/08. Those obligations are reflected in RMA’s policies and procedures.
The Director is satisfied that De Silva failed to take reasonable steps to ensure RMA’s compliance with its record-keeping obligations, thereby contravening section 2 of Ontario Regulation 410/07.

C. Use of Mortgage Broker or Brokerage Title by Unlicensed Entity

Section 11(1) of the Act provides that no person or entity shall use in Ontario the title of “mortgage brokerage”, or a variation or abbreviation, unless they are licensed as a mortgage brokerage. Section 11(2) prohibits descriptions that might reasonably be expected to lead to the belief that they are a mortgage brokerage.
Sections 11(3) and 11(4) of the Act similarly protect the title of “mortgage broker”.
Mortgage agents and brokers are prohibited from including false, misleading or deceptive information in their public relations materials pursuant to section 9 of Ontario Regulation 187/07.
The title protection for mortgage brokerages, brokers, and agents ensures the public can be confident that they are dealing with a licensed entity or individual with the training, legal obligations, and insurance required under the Act and its regulations.

C.1 AMB

AMB contravened the Act by incorporating and advertising under the name Approved Mortgage Brokers Inc. This business name might reasonably lead to the belief that the business is a mortgage brokerage or broker, despite not being licensed under the Act.
Similarly, the AMB website implied that AMB was a licensed broker or brokerage, including by referring to itself as a “FSRA licensed mortgage broker.”
The Director is satisfied that AMB contravened section 11 of the Act.

C.2 Asnafi

Despite being warned about the prohibition on deceptive public relation materials in the 2020 Warning Letter, Asnafi’s email signature continued to reference AMB, the Finch Office continues to display a sign advertising the company, and the AMB website continued to imply that AMB was a brokerage or broker.
Public relations materials are broadly defined in section 1 of Ontario Regulation 187/08 and includes any advertisement that the agent or broker publishes, circulates or broadcasts by any means. This includes advertisements like signage, websites, and an email signature.
The Director is satisfied that Asnafi used deceptive public relations materials in contravention of section 9 of Ontario Regulation 187/07.

IV. GROUNDS TO REFUSE RENEWAL OF ASNAFI’S LICENCE

Section 16(4) of the Act states that the Chief Executive Officer shall renew the licence of an applicant who satisfies the prescribed requirements for renewal of the licence unless the Chief Executive Officer believes, on reasonable grounds, that the applicant is not suitable to be licensed having regard to such circumstances as may be prescribed and such other matters as the Chief Executive Officer considers appropriate.
In determining whether an individual is not suitable to be licensed as a mortgage broker or agent, the CEO is required to have regard to the prescribed circumstances in s. 10 of Ontario Regulation 409/07.
1. Whether the individual’s past conduct affords reasonable grounds for belief that he or she will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
2. Whether the individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
3. Whether the individual has made a false statement or has provided false information to the Chief Executive Officer with respect to the application for the licence.
The Director is satisfied that both circumstances 1 and 2 are applicable to Asnafi, and that they independently support the determination that he is not suitable to be licensed.
Asnafi submitted altered or fabricated documents in connection with the Mortgage Applications. The pattern of misconduct indicates that, at best, Asnafi failed to perform basic due diligence to ensure the documents he submitted to the Lender were accurate and authentic.
Lenders rely upon mortgage agents and brokers as a first line of defence against fraud or deceit. By failing to take even basic steps, Asnafi showed that he is not suitable to be licensed as a mortgage broker.
Further, maintaining relevant records is required by the Act and regulations, and is a component of dealing in mortgages in accordance with the law. Asnafi has failed to ensure that required records were kept.
In respect of the second circumstance, Asnafi contravened the Act and its regulations when he misleadingly advertised AMB as a licensed brokerage, despite the 2020 Warning Letter from FSRA. This suggests that Asnafi is ungovernable or unwilling to comply with regulatory requirements.

V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

Section 39 of the Act allows for the imposition of general administrative penalties where a person is or was contravening the Act, or where the person is not or was not complying with a requirement established under the Act.
The Director is satisfied that imposing administrative penalties on Asnafi, De Silva, RMA, and AMB under section 39(1) of the Act will satisfy 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 from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under this Act.
Administrative penalties in the present circumstances will encourage agents, brokers, principal brokers, brokerages, and non-licensees to comply with their obligations under the Act.
The imposition of administrative penalties also prevents Asnafi and RMA from benefiting economically from their non-compliance with the Act. Asnafi kept commissions of $119,501.95 on the 18 funded Mortgage Applications. RMA received from Asnafi $9,000 per year in fees and commissions.
In determining the amount of the administrative penalties, the Director has considered the following criteria as required by section 3(1) 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.

A. Asnafi and AMB

In respect of the first criterion, the Director is satisfied that Asnafi’s conduct with respect to the submission of the altered or fabricated documents to the Lender was, at minimum reckless or negligent.
The submission of altered or fabricated documents in mortgage applications was not a single error or lapse in judgement. The pattern of behaviour spanned 19 applications to a single lender over an extended period of time. Asnafi did not demonstrate that he took reasonable and sufficient steps to confirm if the information in the altered or fabricated documents was accurate prior to submitting them to the Lender.
The Director is also satisfied that Asnafi’s failure to keep the relevant records was, at minimum, reckless. Asnafi did not demonstrate that he made reasonable efforts to maintain the records, nor did he provide an explanation for his failure to do so.
With respect to the misleading public relation materials, the Director is satisfied that Asnafi and AMB behaved intentionally. Asnafi, the controlling mind of AMB, was warned about the conduct in the 2020 Warning Letter and continued to do it anyways. The signage at the Finch Office and the website were intentional steps taken to advertise AMB in contravention of the Act. The conduct could not have been anything but intentional.
In respect of the second criterion, the Director is satisfied that Asnafi’s reckless or negligent conduct as a mortgage agent caused harm to others. As a result of Asnafi’s misconduct:
1. The Lender funded 18 mortgages totaling $11,973,735. The mortgages were funded based on false information as to the assets and financial circumstances of the borrowers;
2. The Lender paid gross commissions of $123,139.45 for the brokering of these 18 mortgages;
3. There is a serious risk that the mortgages may not be affordable or suitable for the borrowers and they may suffer harm if they cannot make their payments. The bank account balances were inflated by an average of $105,690 and the income details for at least one set of borrowers was falsely represented in the tax documents submitted by Asnafi. Accordingly, the mortgages may not be suitable;
4. Borrowers are at risk of the mortgages being called by the lender based on the terms of the mortgages. Having a mortgage called would put borrowers in a difficult and vulnerable position of requiring a new lender, potentially at greater expense or not at all; and
5. In the event the borrowers’ default on the mortgages, the Lender may suffer direct financial harm.
Further, Asnafi’s misconduct as a mortgage broker, licensed and regulated under the Act, undermines public confidence in the regulatory regime established by the Act and its regulations.
The use of fabricated documents may create mistrust between borrowers and lenders that might cause lenders to take increased steps to screen applications, increasing the transaction costs. Lenders may also heighten their requirements and hamper financing for otherwise suitable borrowers.
The Director is also satisfied that Asnafi’s advertising of an unlicensed entity, AMB, as a mortgage brokerage and failure to maintain records harmed public confidence in the adequacy of the regulatory regime. By repeatedly flaunting the mortgage brokerage title protection regime, Asnafi gave the impression that brokerage licensing is not important or serious, and disadvantaged brokerages that comply with the Act and its regulations.
In addition, by not maintaining the required records, Asnafi hindered FSRA’s investigation. Further, responsible brokerages require complete records to respond to complaints and concerns from consumers, and to resolve any dispute.
In respect of the third criterion, the Director is not aware of any steps taken by Asnafi to remedy or mitigate the contraventions described in this proposal, other than updating his email signature to remove the AMB reference and making the AMB website no longer accessible.
In respect of the fourth criterion, the Director is satisfied that Asnafi derived direct economic benefit from the contraventions described in this proposal. Asnafi received a total of $123,139.45 in commissions from the Lender on the 18 funded Mortgage Applications, and kept $119,501.95. He also generated an unknown amount of business thanks to his illegal advertising of AMB.
In respect of the fifth criterion, the Director is aware of the 2020 Warning Letter related to the AMB advertisements.
The Director is satisfied, having regard to all the circumstances, that the proposed total amount of the penalties against Asnafi is not punitive in nature, and the amount is consistent with both purposes of section 38 of the Act.

B. De Silva and RMA

In respect of the first criterion, the Director is satisfied that De Silva behaved negligently in failing to adequately supervise Asnafi in accordance with the Act and its regulations. He did not take reasonable steps to ensure that the information they submitted to lenders was accurate, such as investigating the incomplete Mortgage Fraud Checklists.
Further, De Silva was negligent in failing to take reasonable steps to ensure that RMA complied with its record-keeping obligations and RMA was negligent in not keeping the records. The record-keeping obligations in the regulations are an important and long-standing component of a brokerage’s responsibility. Relying on agents and brokers to provide this information from their personal accounts when there is a spot check, complaint or investigation, is not acceptable and constitutes negligence.
In respect of the second criterion, the Director is satisfied that De Silva’s conduct as a principal broker and RMA’s conduct as a brokerage had the potential to cause harm to others.
De Silva’s failure to take reasonable steps to supervise Asnafi allowed him to continue to submit false or misleading documents to the Lender. As a result, the Lender continued to fund mortgages based on false information.
Further, De Silva’s failure to ensure RMA complied with the record-keeping obligations hindered FSRA’s investigation into Asnafi’s conduct, and would make it difficult for the brokerage to respond to consumer complaints.
In respect of the third criterion, the Director is not aware of any steps taken by De Silva to remedy or mitigate the contraventions described in this proposal.
In respect of the fourth criterion, the Director is satisfied that De Silva and RMA derived direct and indirect economic benefit from the contraventions described in this proposal. As principal broker of RMA, De Silva derived economic benefit from the performance of RMA.
In respect of the fifth criterion, the Director is not aware of 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.
The Director is satisfied, having regard to all the circumstances, that the proposed total amount of the penalties against De Silva and RMA is not punitive in nature, and the amount is consistent with both purposes of section 38 of the Act.
The Director is satisfied, having regard to all the circumstances, that the proposed total amount of the penalty against AMB is not punitive in nature, and the amount is consistent with both purposes of section 38 of the Act.
Such further and other reasons as may come to the attention of the Director.

DATED at Toronto, Ontario, May 30, 2024.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

Si vous desirez recevoir cet avis en français, veuillez nous envoyer votre demande par courriel immediatement a : contactcentre@fsrao.ca.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE AND TO IMPOSE ADMINISTRATIVE PENALTIES