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 Avraj Singh Dulay.

MINUTES OF SETTLEMENT AND UNDERTAKING

PART I – INTRODUCTION

1. Avraj Singh Dulay (“Dulay”) was licensed as a mortgage agent (licence # M18002058) under the Act from September 18, 2018, until his licence expired on March 31, 2023.
2. At all relevant times, Dulay was licensed and conducting business on behalf of his brokerage, The Mortgage Alliance Company of Canada Inc. (licence # 10530) (“Mortgage Alliance”).
3. On July 23, 2024, the Director, Litigation and Enforcement (“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 Dulay (the “NOP”).
4. Dulay disputed the allegations and, on August 7, 2024, requested a hearing before the Financial Services Tribunal (the “Tribunal”) in respect of the NOP.
5. Dulay 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

A. False or Deceptive Information or Documents

6. On September 1, 2022, Mortgage Alliance advised FSRA that it had terminated Dulay following an inquiry from a developer of preconstruction units seeking to confirm the legitimacy of certain mortgage preapproval letters.
7. Mortgage Alliance discovered Dulay fabricated 17 mortgage preapproval letters (the “Letters”).
8. The Letters were on Mortgage Alliance letterhead and purported to show that the prospective borrowers had received mortgage preapprovals from a certain lender.
9. The Letters were provided to a developer with whom each of the 17 borrowers referenced in the Letters had an agreement of purchase and sale for residential units in a new housing development. The agreements required the purchasers to provide evidence of a satisfactory mortgage pre-approval to the developer.
10. In an interview with FSRA, Dulay admitted he created the Letters without the knowledge or approval of Mortgage Alliance or the lender.
11. Dulay also admitted, among other things, that he made a mistake and that the preapproval letters should have gone through the lender.

B. Dulay’s Conduct Caused Brokerage Non-Compliance

12. Dulay admitted, and Mortgage Alliance confirmed, that he did not maintain files with Mortgage Alliance related to the Letters.
13. Dulay kept his clients’ documents in email and WhatsApp messages outside the knowledge or control of Mortgage Alliance, contrary to its policies.

PART III – NON-COMPLIANCE WITH THE ACT

14. By engaging in the conduct described in Part II of these Minutes of Settlement and Undertaking (“Minutes”), Dulay admits and acknowledges that he breached the Act as follows:
    1. By contravening section 43(2) of the Act by giving false or deceptive information or documents when dealing in mortgages in Ontario; and
    2. By contravening section 3 of Ontario Regulation 187/08 by doing or omitting to do anything that might reasonably cause the brokerage on whose behalf he was authorized to deal or trade in mortgages to fail to comply with a requirement under the Act, i.e. causing his brokerage to fail in its requirement to maintain and retain required mortgage brokering activity records contrary to section 48 of Ontario Regulation 188/08.

PART IV – TERMS OF SETTLEMENT

15. Dulay admits the facts contained in Part II of these Minutes and admits the contraventions stated in Part III of these Minutes.
16. Dulay acknowledges and agrees that he 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 of Settlement voluntarily, understanding the consequences of doing so.
17. Dulay 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 further Notice of Proposal as may be required or prosecution under the Provincial Offences Act.
18. Dulay acknowledges that, notwithstanding paragraph 29(iii) of these Minutes, the facts in Part II of these Minutes may be considered for the purposes of assessing his suitability on any future applications for a licence under the Act or otherwise with FSRA.

(a) Issuance of Order

19. Dulay acknowledges that, upon execution of these Minutes by both Parties, the Order, attached hereto attached as Schedule “A” (the “Order”), will be issued, pursuant to which Dulay will pay eighteen (18) administrative penalties in the total amount of $25,000 as follows:
    1. Seventeen (17) administrative penalties totalling $17,000, for giving false or deceptive information or documents when dealing in mortgages in Ontario, with respect to 17 potential mortgage transactions, contrary to section 43(2) of the Act; and
    2. An administrative penalty of $8,000 for doing or omitting to do anything that might reasonably cause the brokerage on whose behalf he was authorized to deal or trade in mortgages to contravene section 48 of Ontario Regulation 188/08, contrary to section 3 of Ontario Regulation 187/08.

(b) Process for Execution of Settlement

20. Dulay acknowledges that these Minutes are not binding on the Director until signed by the Director.
21. 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.
22. Upon receiving an executed copy of these Minutes from FSRA, Dulay will withdraw his 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 five (5) business days.
23. 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 the Order in the form attached as Schedule “A” to these Minutes.
24. 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

25. 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.
26. If either Party does 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 Dulay; and
    2. The Parties 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.
27. Upon issuance of the Order:
    1. Dulay agrees that these Minutes and the Order form part of his 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 him or any affiliated entities;
    2. Dulay 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

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

DATED 12/31/2024 at Stouffville, Ontario.

Original signed by

Avraj Singh Dulay

DATED 12/31/2024 at Stouffville, Ontario.

Original signed by

Jaswinder Dulay
Name of Witness

DATED at Toronto, Ontario, January 6, 2025.

Original signed by

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

By delegated authority from the Chief Executive Office

SCHEDULE 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 Avraj Singh Dulay (“Dulay”).

ORDER TO IMPOSE ADMINISTRATIVE PENALTIES

Dulay was previously licensed as a mortgage agent (licence # M18002058) under the Act until his licence expired on March 31, 2023.

On July 23, 2024, 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 impose administrative penalties on Dulay for the following contraventions:

1. Giving false or deceptive information or documents when dealing in mortgages in Ontario, with respect to 17 potential mortgage transactions, contrary to section 43(2) of the Act; and
2. Doing or omitting to do anything that might reasonably cause the brokerage on whose behalf he was authorized to deal or trade in mortgages to contravene section 48 of Ontario Regulation 188/08, contrary to section 3 of Ontario Regulation 187/08.

A Request for Hearing (Form 1) dated August 7, 2024, was delivered to the Financial Services Tribunal (the “Tribunal”), in accordance with section 39(5) of the Act respecting the Notice of Proposal.

On [TBD], Dulay withdrew the Request for Hearing and on the Tribunal closed its file with respect to the matter. This order is made pursuant to a settlement entered into by Dulay and the Director.

 

ORDER

Eighteen administrative penalties, in the total amount of $25,000, are hereby imposed on Avraj Singh Dulay for the reasons set out in the Minutes of Settlement and Undertaking.

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

If Dulay 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 an 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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