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

AND IN THE MATTER OF 1539339 Ontario Inc.

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I - INTRODUCTION

1. 1539339 Ontario Inc. ("1539339") is a private corporation.
2. On July 19, 2024, the Director, Litigation & 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 1539339 (the "NOP").
3. 1539339 disputed the allegations and, on or about August 5, 2024, requested a hearing before the Financial Services Tribunal (the "Tribunal") in respect of the NOP.
4. 1539339 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

5. 1539339 has never been licensed under the Act.
6. During the relevant time, "AJ" and "GS" were a couple that resided in Ontario.
7. On June 2, 2022, AJ and GS received a $1,000,000 private mortgage from 1539339 that had a $45,000 lender fee with an interest rate of 7.99% for a term of 6 months.
8. On June 30, 2022, a major bank issued a mortgage for $1,000,000 for a 5-year term with a variable 3.26% interest rate. The proceeds of this mortgage were used to pay out the private mortgage with 1539339.

PART Ill - NON-COMPLIANCE WITH THE ACT

9. By engaging in the conduct described above in Part II, 1539339 admits and acknowledges that it breached the Act by carrying on business as a mortgage lender in Ontario without a license, contrary to section 4(2) of the Act.

PART IV - TERMS OF SETTLEMENT

10. 1539339 admits the facts contained in Part II of these Minutes of Settlement and Undertaking ("Minutes").
11. 1539339 acknowledges and agrees that it has been given the opportunity to seek independent legal advice and has done so (or has waived the right to do so) and is entering into these Minutes voluntarily, understanding the consequences of doing so.
12. 1539339 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

13. 1539339 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

14. 1539339 acknowledges that these Minutes are not binding on the Director until signed by the Director.
15. 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.
16. Upon receiving an executed copy of these Minutes from FSRA, 1539339 will withdraw its 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 business days.
17. 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.
18. 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

19. The Parties will keep the terms of these Minutes and the Order confidential until the Order is issued, except that:
    1. The Director shall be permitted to disclose the Minutes and the Order within FSRA; and
    2. The Parties shall be permitted to inform the Financial Services Tribunal.
20. 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 1539339; and
    2. FSRA and 1539339 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.
21. Upon issuance of the Order:
    1. 1539339 agrees that these Minutes and the Order form part of its 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 it or any affiliated entities;
    2. 1539339 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

22. Whether or not the Order is issued, 1539339 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.
23. Upon issuance of the Order:
    1. 1539339 waives all rights to a hearing before the Tribunal regarding the NOP;
    2. 1539339 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 1539339 arising solely from the facts contained in Part II of these Minutes, unless facts not disclosed by 1539339 come to the attention of FSRA that are materially different from those contained in Part II of these Minutes or 1539339 fails to comply with any term in the Order; and
    4. 1539339 agrees that should it fail to comply with any term in these Minutes or the Order, FSRA is entitled to bring any proceedings available to it.

DATED Dec 10, 2024 at Mississauga, Ontario.

Original signed by

Vikas Kumar
1539339 Ontario Inc.

DATED Dec 10, 2024 at Mississauga, Ontario.

Original signed by

Jagwinder Singh Grewal
Name of Witness

DATED December 10, 2024 at Toronto, Ontario.

Original signed by

Elissa Sinha
Director, Litigation & Enforcement
Financial Services Regulatory Authority of Ontario

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 38 and 39;

AND IN THE MATTER OF 1539339 Ontario Inc. ("1539339")

ORDER TO IMPOSE AN ADMINISTRATIVE PENALTY

1539339 has never been licensed under the Act.

On July 19, 2024, the Director, Litigation & 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 to impose an Administrative Penalty in respect of 1539339.

A Request for Hearing (Form 1), dated August 5, 2024 was delivered to the Financial Services Tribunal (the "Tribunal") in accordance with sections 21(3) and 39(5) of the Act respecting the NOP.

On [date], 1539339 withdrew the Request for Hearing, and, on [date], the Tribunal closed its file in respect of this matter. Therefore, pursuant to sections 21(7) and 39(7) of the Act, the Director makes the following Order.

ORDER

An administrative penalty in the amount of $45,000 is hereby imposed on 1539339 Ontario Inc., for the reason set out in the Minutes of Settlement.

TAKE NOTICE THAT the Financial Services Regulatory Authority of Ontario will deliver an invoice to 1539339 Ontario Inc. with information as to where and how to pay the administrative penalty. 1539339 Ontario Inc. must pay the administrative penalty no later than thirty (30) days after the Order is issued unless otherwise agreed with the Financial Services Regulatory Authority of Ontario.

If 1539339 Ontario Inc. fails to pay the administrative penalty in accordance with the terms of this Order, the Chief Executive Officer may file the Order with the Superior Court of Justice and the Order may be enforced as if it were an order of the court. An administrative penalty that is not paid in accordance with the terms of the Order imposing the penalty is a debt due to the Crown and is enforceable as such.

DATED at Toronto, Ontario,

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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