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, 19 and 21;

AND IN THE MATTER OF SHAH ATA HUSSAIN FARIDI.

NOTICE OF PROPOSAL TO REVOKE A LICENCE AND REFUSE A LICENCE

TO: Shah Ata Hussain Faridi

TAKE NOTICE THAT pursuant to sections 14, 19 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 revoke the Mortgage Agent Level 1 licence and refuse to issue the Mortgage Agent, Level 2 licence issued to Shah Ata Hussain Faridi.

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, 7th 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 Licensee, Shah Ata Hussain Faridi (“Faridi”), is not suitable to be licensed as a mortgage agent. On his applications to be licensed as a Mortgage Agent, Level 1, in 2022 and his renewal application in 2023, Faridi made false statements or provided false information to the Chief Executive Officer with respect to the application for a licence.
2. On February 23, 2024 Faridi’s Brokerage initiated an application to upgrade his licence to a Mortgage Agent, Level 2.
3. Further, Faridi’s past conduct affords reasonable grounds for the belief that Faridi will not trade in mortgages in accordance with the law and with integrity and honesty.
4. These are reasons for the proposal by the Director to revoke the Mortgage Agent Licence, Level 1, and refuse to issue the Mortgage Agent, Level 2 Licence.

II. BACKGROUND

A. FSRA licensing history

5. Faridi is licensed as a Mortgage Agent, Level 1 (licence # M22003712) under the Act.
6. Faridi first submitted an application to FSRA on September 21, 2022.
7. Faridi submitted a renewal application for his Mortgage Agent licence, on March 10, 2023.
8. Faridi’s Brokerage, IWILLGETUMORTGAGE SERVICES LTD., initiated an application to upgrade Faridi to a Mortgage Agent, Level 2, on February 23, 2024.
9. Faridi is currently licensed as a Mortgage Agent, Level 1, under the Act.

B. Licensing under the Ontario Motor Vehicle Dealers Act, 2002

10. Faridi’s registrations with the Ontario Motor Vehicle Industry Council (“OMVIC”) were revoked in February 2022.
11. OMVIC has the delegated responsibility for administering and enforcing the Motor Vehicle Dealers Act 2002 (the “MVDA”), a consumer protection statute.
12. OMVIC regulates motor vehicle salespersons and dealers.
13. Faridi was first registered as a motor vehicle salesperson in May 2017, after completing the Automotive Certification Course (the “Course”). The Course is administered on behalf of OMVIC by the Automotive Dealership Management program at Georgian College. The Course exam is a provincial certification exam.
14. Faith Enterprises Inc., o/a Faridi Motors (the “Dealer”), was first registered as a motor vehicle dealer in or around August 2018. Faridi was the Director as well as person in charge of the day-to-day activities of the Dealer.
15. On August 17, 2018, Faridi executed terms and conditions of registration on behalf of the Dealer. Specifically, Faridi agreed to provide purchasers with written disclosure, on the bill of sale, of all material facts about the vehicles he sells.
16. On May 19, 2020, a Notice of Complaint was issued by OMVIC alleging that between November 6, 2018 and January 9, 2020, Faridi failed to make proper disclosures regarding the vehicle history on ten (10) vehicles sold, contrary to sections 6, 7 and 9 of the the Motor Vehicle Dealers Act, 2002, Ontario Regulation 332/08 (“Code of Ethics”).
17. The Notice of Complaint was resolved by way of Agreed Statement of Fact where Faridi agreed, on behalf of the Dealer, that the Dealer had breached the Code of Ethics by failing to provide written disclosure with respect to three (3) vehicles sold by the Dealer.
18. On February 4, 2021, as a result of an Agreed Statement of Fact and Joint Submission on Penalty the OMVIC Discipline Committee (“OMVIC Discipline Decision”) ordered the following against the Dealer:
    1. pay a fine in the amount of $3600 by no later than March 1, 2021;
    2. successfully retake and complete the Course by no later than April 30, 2021;
    3. to offer the Course to all future salespeople employed by the Dealer.
19. Pursuant to the OMVIC Discipline Decision, dated February 4, 2021, Faridi registered in the Course on March 15, 2021 and took the online exam.
20. Prior to taking the exam, all students agree to the terms of the exam which include not speaking to anyone during the course of the exam, having no one else in the room and not using unauthorized materials. The exam was video and audio recorded in its entirety and reviewed by a third party proctor service. Faridi’s exam video was flagged due to non-compliance with the exam rules.
21. Specifically, the exam proctor observed Faridi receiving prohibited assistance while completing the exam.
22. OMVIC issued a Notice of Proposal to Revoke (the “NOP”) the registrations of the Dealer and Faridi alleging that Faridi had received prohibited assistance from another individual while completing the on-line Course exam. In June 2021, Faridi filed a a Notice of Appeal to the Licence Appeal Tribunal (the “LAT”) regarding the NOP. The hearing on the merits and penalty took place on December 6, 2021. On February 14, 2022, the LAT confirmed OMVIC’s NOP by finding Faridi had received prohibited assistance during the Course exam and as result of that finding, revoked the registrations of the Dealer and Faridi.
23. The LAT expressed concern that within three (3) years of being registered as a salesperson and two years of being registered as a Dealer, Faridi appeared before the OMVIC Discipline Committee for failing to properly disclose vehicle information. The LAT found that Faridi failed to learn from his mistakes and chose not to comply with the terms of the online exam by receiving prohibited assistance.

C. Licensing with the Real Estate Council of Ontario (RECO)

24. The Real Estate Council of Ontario (RECO) is designated by the provincial government as the administrative authority responsible for administering and enforcing the Trust in Real Estate Services Act, 2020 (TRESA) and its associated regulations. Faridi has been registered with RECO since 2021.
25. Faridi submitted an application for registration to RECO on September 20, 2021. On the RECO application for registration, Faridi answered “no” when asked whether he “was or will be registered, engaged or employed in any other business, occupation or profession.” Faridi provided that answer despite having been registered with OMVIC since 2017.
26. On September 5, 2023 Faridi submitted an application to RECO to renew his licence. He answered “no” to the question of whether he “had ever had a registration and/or licence or professional status of any kind refused, suspended, revoked or cancelled.” Faridi did not disclose that his OMVIC licences had been revoked in February 2022.
27. On both of 2021 and 2023 applications, Faridi confirmed he had personally completed the application and certified that the information provided in the applications were truthful.

D. FSRA Applications – 2022 and 2023

28. On September 21, 2022, (“2022 Application”) Faridi submitted his initial application to FSRA to be a mortgage agent. On March 10, 2023, (“2023 Application”) he submitted a renewal application. Applicants applying for a licence and renewal of a licence under the Act are asked a series of questions intended to assess suitability. Faridi answered “no” on both applications to the following question.
    1. Have you ever been refused registration, or a licence under any legislation which required registration or licensing to deal with the public in any capacity (e.g. insurance agent, RIBO broker, securities dealer, motor vehicle dealer etc) in any province, territory, state, or country; or have you held such a licence and been the subject of a disciplinary proceeding that resulted in a penalty being imposed (e.g. suspension, termination, reprimand, surrender etc.,) or are you the holder of such a licence and currently the subject of an investigation or upcoming proceeding that may result in a penalty being imposed (emphasis added).
29. By answering “no” to the above question on both applications, Faridi made a false statement or provided false information to the Chief Executive Officer with respect to the application for the licence.

GROUNDS FOR REVOCATION OF A LICENCE AND REFUSAL OF A LICENCE

30. Section 14(1) of the Act states that the Chief Executive Officer shall issue a licence 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
31. Section 19(1) of the Act states that the Chief Executive Officer may, by order, revoke a licence in any of the circumstances in which he or she is authorized to suspend a licence.
32. Pursuant to section 18(1) of the Act, such circumstances are:
    1. if the licensee ceases to satisfy the prescribed requirements for issuance or renewal, as the case may be, of the licence;
    2. if the Chief Executive Officer believes, on reasonable grounds, that the licensee is no longer suitable to be licensed having regard to the circumstances, if any, prescribed for the purposes of subsection 14(1) or 16(4), as the case may be, and such other matters as the Chief Executive Officer considers appropriate;
    3. if the licensee contravenes or fails to comply with a requirement establishedunder this Act; or
    4. if such other circumstances as may be prescribed.
33. 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 (the “Regulation”).
    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.
34. Faridi has demonstrated a consistent and ongoing pattern of dishonesty in his dealings with multiple regulatory bodies and consumers. His dishonest actions include providing false information in two licensing applications that concealed the OMVIC Discipline Decision, OMVIC NOP, and LAT decision.
35. Providing truthful and honest disclosure during the application process is essential to FSRA’s gatekeeping function. FSRA assesses suitability for licensing of applicants to ensure consumers receive competent and ethical mortgage brokering services from licensed mortgage agents. A licence constitutes FSRA’s endorsement to the public and consumers who rely on licensees to understand their options to make informed decisions about important financial decisions
36. Faridi’s conduct affords reasonable grounds for belief that he will not deal or trade in mortgages in accordance with the law and with integrity and honesty. Accordingly, the Director believes that continuing to licence Faridi under the Act will pose a risk to the public interest that cannot be adequately mitigated by attaching terms and conditions to the licence.
37. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, March 18, 2024

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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