IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006,
S.O. 2006, c.29, as amended (the “Act”), in particular sections 14 and 21;

AND IN THE MATTER OF Nexus Seulal.

NOTICE OF PROPOSAL TO REFUSE TO ISSUE LICENCE

TO: Nexus Seulal

TAKE NOTICE THAT pursuant to sections 14 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 issue a mortgage agent licence to Nexus Seulal.

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) AND 21(3) 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, 7^th 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.

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. The Director has reasonable grounds to believe Nexus Seulal (“Seulal”) will not deal or trade in mortgages in accordance with the law and with honesty and integrity if licensed as a mortgage agent.
2. These are the reasons for the proposal by the Director to refuse to issue a mortgage agent licence to Seulal.

II. BACKGROUND

3. On March 14, 2023, Seulal applied for a new mortgage agent licence under the Act to the Financial Services Regulatory Authority of Ontario ("FSRA”).
4. On the application, Seulal disclosed that in 2021 he was investigated by Toronto- Dominion Canada Trust (“TD”) while an employee. Seulal was investigated for breaching TD’s Code of Conduct and Ethics Policy and for misusing a position of trust as a Personal Banking Associate (“TD Investigation”).
5. Seulal also disclosed that in November 2022, the Ontario Securities Commission Compliance and Registrant Regulation Branch (the “CRRB”) recommended to refuse his registration as a dealing representative in the category of exempt market dealer based on their assessment of his suitability to be registered.

A. TD Investigation

6. Information about the TD Investigation was provided by Seulal and the CRRB. Seulal was employed by TD in various roles between September 2017 and April 2021.
7. TD’s Investigation into Seulal centered around his conduct in violating TD’s policies and procedures to facilitate opening multiple client accounts on the instructions of an individual he did not know and could only identify as “A.J.”. Seulal opened bank accounts, issued access cards and personal identification numbers, and submitted credit card applications for approximately 15 to 20 clients without confirming their identities in person, contrary to TD’s policies and procedures.
8. On April 14, 2021, Seulal resigned from TD while still under investigation.
9. The letter to Seulal from the CRRB advising him of the recommendation to refuse his registration indicates that TD had deemed the A.J. accounts as fraudulent.

B. CRRB Recommendation to Refuse Registration

10. On November 28, 2022, the CRRB recommended that Seulal’s application for registration as a dealing representative be refused. The CRRB was of the view that Seulal was unsuitable to be registered, and that his registration was otherwise objectionable. Consequently, the firm sponsoring Seulal withdrew his application. Without sponsorship Seulal did not qualify for registration with the Ontario Securities Commission.

i. CRRB Interview

11. Seulal participated in a voluntary interview with the CRRB. In the interview, Seulal admitted to opening the A.J. accounts, accessing the TD profiles of an ex-fiancée and a former co-worker, and opening an account for a friend without confirming their identities in person, contrary to TD policies and procedures.
12. Seulal provided explanations regarding the A.J. accounts that the CRRB viewed as not credible and unreasonable. Notwithstanding his inability to provide any significant information about A.J., Seulal stated he trusted him and facilitated A.J.’s requests to open multiple accounts without verifying identities as per TD policies and procedures.
13. While Seulal admitted to making a bad judgment call and acknowledged TD’s policies and procedures were in place to specifically prevent fraud, he expressed dissatisfaction with the TD Investigation. Seulal appeared to shift his responsibility for failing in his gatekeeper obligations to A.J. as the one engaged in fraudulent activities. In the view of the CRRB, Seulal minimized the seriousness of the concerns TD was investigating and the fact that his own conduct as a bank employee directly facilitated A.J.’s fraudulent activity.
14. In the view of the CRRB, Seulal’s explanations demonstrated at a minimum he did not act with the due care and diligence required by a banking professional in verifying customer identity, maintaining confidentiality of customer information, conducting due diligence, and identifying and preventing potential fraud

C. FSRA Licensing

15. On March 14, 2023, Seulal applied for a mortgage agent licence.
16. Seulal disclosed the TD Investigation and the CRRB recommendation on his application.

III. GROUNDS FOR REFUSAL TO ISSUE LICENCE

17. Section 14(1) of the Act states that the Chief Executive Officer shall issue a license to an applicant who satisfies the prescribed requirements for 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.
18. Section 10 of Ontario Regulation 409/07 states that, in determining whether an individual is not suitable to be licensed as a mortgage agent, the Chief Executive Officer is required by subsections 14(1) and 16(4) of the Act to have regard to the following prescribed circumstances:
    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.
19. FSRA assesses suitability to ensure consumers receive competent and ethical mortgage brokering services from licensed mortgage agents. Consumers rely on licensees to understand their options to make informed decisions about important financial decisions related to the purchase and refinancing of properties. Mortgage fraud is a growing problem in Ontario. FSRA is required to scrutinize the suitability of agents who play a key role under the scheme of the Act to prevent mortgage fraud.
20. Mortgage agents are required to avoid acting or failing to act in a manner they ought to know would facilitate fraud by section 3.1 of Ontario Regulation 187/08. Mortgage agents are also prohibited by section 43(2) of the Act from knowingly or unknowingly assisting another in giving false or deceptive information while dealing or trading in mortgages, and by section 3 of Ontario Regulation 187/08 where they could be reasonably expected to cause their brokerage to do the same. Per FSRA’s Guidance: Detecting and Preventing Mortgage Fraud, FSRA interprets section 43(2) as requiring mortgage agents to take reasonable steps to detect and prevent fraud, which includes following their brokerage’s policies and procedures relating to identity verification.
21. There are reasonable grounds for belief that Seulal is not suitable to be licensed as a mortgage agent. Seulal intentionally and repeatedly violated TD’s policies and procedures relating to identity verification, resulting in him facilitating fraud. Seulal’s explanations regarding the A.J. accounts, and his failure to accept accountability for the seriousness of his conduct resulting in fraud are compelling and credible information that he will not carry on business as required under the Act.
22. Seulal’s past conduct calls into question his ability or willingness to comply with the requirements of the Act and gives the Director reasonable grounds for belief that Seulal will not deal or trade in mortgages in accordance with the law and with integrity and honesty if licensed.
23. Seulal’s misconduct was recent. There is no evidence that Seulal was under any unusual or severe pressure at the time.
24. The public interest cannot be adequately protected by attaching terms or conditions to the licence.
25. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, November 7, 2023

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.