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, 19, 20, 21, 35, 38, and 39;

AND IN THE MATTER OF Robert Brock Frost

AND IN THE MATTER OF Capitis Mortgage Investment Corp.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE, TO REFUSE SURRENDER AND TO REVOKE LICENCE, TO IMPOSE COMPLIANCE ORDER, AND TO IMPOSE AN ADMINISTRATIVE PENALTY

TO: Robert Brock Frost

AND TO:
Capitis Mortgage Investment Corp.
2020 Lanthier Drive, Unit 9,
Ottawa, ON, K4A 3V4

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 issued to Robert Brock Frost (licence # M17000624) (“Frost”).

AND TAKE NOTICE THAT pursuant to sections 19, 20, and 21 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to refuse surrender and revoke the mortgage administrator licence issued to Capitis Mortgage Investment Corp. (licence # 13310) (“Capitis”).

AND TAKE NOTICE THAT pursuant to section 35 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to order Frost and Capitis to:

within 10 business days, Frost shall file Capitis’ 2025 Annual Information Return pursuant to section 2 of Ontario Regulation 193/08, and the 2025 Financial Information pursuant to section 3 of Ontario Regulation 193/08.
within 10 business days, Frost and Capitis shall provide documentary proof that all mortgages under administration have been transferred to another licensed mortgage administrator or the investor has confirmed in writing that they will self administer their mortgage investment.

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 of $50,000 on Robert Brock Frost for contravening section 2(3) of the Act.

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), 21(3), 35(3), 35(4), 39(2), AND 39(5) 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 W, 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. TAKE FURTHER NOTICE of the payment requirements in section 4 of Ontario Regulation 192/08, which states 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

These are reasons for the proposal by the Director to:
1. refuse to renew the mortgage broker licence issued to Robert Brock Frost (“Frost”) (licence # M17000624);
2. refuse the surrender and revoke the mortgage administrator licence issued to Capitis Mortgage Investment Corp (“Capitis”) (licence # 13310);
3. issue a compliance order against Frost and Capitis; and
4. issue administrative penalties against Frost.
Frost’s past conduct affords reasonable grounds for the belief that Frost is not suitable to be licensed as a mortgage broker and will not deal or trade in mortgages in accordance with the law and with integrity and honesty. Frost engaged in mortgage brokering outside his sponsored brokerage, violated the conditions imposed on his licence for previous misconduct, and operated Capitis in a manner that contravened the Act and Regulations.
Capitis has contravened the Act and Regulations in its operation as a mortgage administrator and is no longer suitable to be licensed. Capitis failed to utilize a trust account for mortgage payments and failed to reconcile payments made on mortgages under administration. These requirements are fundamental to a licensed mortgage administrator. As such the Director believes that it is not in the public interest to allow Capitis to surrender its licence and that the licence should be revoked.

II. LICENSING

Frost is licensed as a mortgage broker (licence # M17000624), under the Act. On March 12, 2026, he applied for licence renewal.
During the relevant time, Frost was authorized to deal in mortgages on behalf of The Mortgage Alliance Company of Canada (“TMACC”). In January 2026, Frost transferred to a new mortgage brokerage.
Capitis is licensed as a mortgage administrator (licence # 13310) under the Act. Frost is the sole director of Capitis. Capitis was first licensed on November 10, 2020.

III. FACTS

A. FSRA Examination

On June 9, 2025, FSRA staff commenced an examination of the mortgage administration activities of Capitis. FSRA examined 7 mortgage files (“Reviewed Mortgages”) and found numerous contraventions of the Act and Regulations, including:
1. comingling of operating and deemed trust funds outside of the required trust account;
2. failing to prepare monthly reconciliations of the trust account;
3. inaccurately recording mortgage payment information in Borrower/Lender Statements and Commitment Letters;
4. failing to maintain required records; and
5. paying investors before receiving funds from the borrowers.
Frost did not provide a response for the deficiencies other than a blanket denial, but assured FSRA that he was winding down the administration of Capitis by April 1, 2026. Frost noted that each investor was given the option to self-administer or to seek another licensed mortgage administrator.
FSRA requested Frost provide information regarding the investors and which option they chose. Frost refused to provide this information.
On March 26, 2026, Frost submitted an application to surrender Capitis’ mortgage administrator licence. FSRA requested information relating to Capitis’ arrangements for winding up or transferring its business, records, and trust funds. Frost provided partial information but refused to provide detailed information about investors that was necessary for FSRA to evaluate whether appropriate arrangements had been made for each mortgage under administration.
Capitis has not filed its 2025 Annual Information Return or 2025 Financial Information as required.

B. Mortgage Brokering Outside Sponsoring Brokerage

All mortgages under administration for Capitis appear to be brokered by Frost. Frost arranged the mortgages, executed documents, provided disclosure statements, and engaged in communication with the parties on the Reviewed Mortgages. All mortgages listed in Capitis’ mortgages under administration state that TMACC was the mortgage brokerage involved in the transaction.
For 6 of the Reviewed Mortgages, the Disclosure form states that “Robert Brock Frost has arranged this mortgage on behalf of Mortgage Alliance Canada [sic] as a licensed Mortgage Broker”.
TMACC has no record of the Reviewed Mortgages brokered by Frost and administered by Capitis.

C. Previous Conditions on Licence

As a result of a complaint, in July 2023, Frost agreed to the imposition of conditions on his mortgage broker licence. One of these conditions was to require that Frost be supervised and that the supervisor initial all mortgage disclosure documents.
None of the mortgage disclosure documents provided during the examination were initialed by Frost’s supervisor. This is consistent with the fact that the Reviewed Mortgages were not brokered through TMACC, contrary to the Disclosure forms.

IV. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. Frost

Section 2(3) of the Act states that no individual shall deal in mortgages in Ontario for remuneration unless they have a mortgage broker’s or agent’s licence and are acting on behalf of a mortgage brokerage.
Frost contravened section 2(3) of the Act by dealing in mortgages outside his brokerage for remuneration on the Reviewed Mortgages. Frost falsely indicated that the mortgages were brokered through TMACC. In these transactions, generic “placement fees”, “Admin fees” or “Referral fees” were paid to Frost and Capitis for the transactions. In one instance, Frost received $23,042.30 through these fees to Capitis.

B. Capitis

Section 35 of Ontario Regulation 189/08 states that a mortgage administrator shall deposit deemed trust funds that it receives into its authorized trust account.
Section 37 of Ontario Regulation 189/08 states that a mortgage administrator shall, every month, prepare a reconciliation statement for the authorized trust account and an officer of the mortgage administrator shall review the statement and sign and date it to indicate that he or she certifies that it is accurate.
Section 23(1) of Ontario Regulation 189/08 states that a mortgage administrator shall not make a payment to a lender or investor in connection with the administration of a mortgage unless the payment is made from the funds paid under the mortgage by a borrower.
Capitis maintained a trust account but did not use it to deposit trust funds for the mortgages under administration. Additionally, since the trust account was not being used properly, Capitis failed to prepare monthly reconciliation statements, and no one signed to certify that it was accurate.
Capitis paid investors monthly interest payments without having received funds from the borrowers, contrary to section 23(1) of Ontario Regulation 189/08. Since Capitis did not use a trust account, the source of funds used for interest is unclear.

V. GROUNDS FOR REFUSAL TO RENEW 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.
Section 10 of Ontario Regulation 409/07 under the Act, provides that in determining whether an individual is not suitable to be licensed as a mortgage broker or 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.
Frost has demonstrated that he will not deal or trade in mortgages in accordance with the law and with integrity and honesty. Frost breached the licensing conditions imposed on his licence. He also contravened the Act by engaging in mortgage brokering outside of his authorizing brokerage. Additionally, Frost falsely represented to the borrowers and lenders/investors that TMACC was the brokerage in the transactions. In acting outside the brokerage, Frost undermined the regulatory structure and attempted to circumvent the conditions on his licence.
As the sole director of Capitis, Frost was Capitis’ directing mind and is responsible for its contraventions.
The Director believes that continuing to licence Frost under the Act will pose a risk to the public interest that cannot be adequately mitigated by attaching terms and conditions to the licence, as Frost engaged in misconduct while subject to previously imposed conditions.

VI. GROUNDS FOR REFUSING SURRENDER AND REVOKING LICENCE

Section 20(1) of the Act states that a licensee may apply to the Chief Executive Officer for permission to surrender his, her, or its licence.
Section 20(3) of the Act states that the Chief Executive Officer shall allow the applicant to surrender the licence unless the Chief Executive Officer believes, on reasonable grounds, that the surrender of the licence is not in the public interest having regard to such criteria as may be prescribed and such other factors as the Chief Executive Officer considers appropriate.
Section 4.1 of Ontario Regulation 411/07 sets out the prescribed criteria the Chief Executive Officer shall have regard to when determining whether it is not in the public interest to allow a licensee to surrender a mortgage administrator’s licence, including:
1. Whether the applicant has any funds remaining in its mortgage administrator’s trust account that was being maintained under the standards of practice.
2. Whether any funds in the applicant’s mortgage administrator’s trust account have not been accounted for.
3. Whether the applicant has failed to make reasonable arrangements for winding up or transferring its business of administering mortgages in Ontario.
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.
According to section 18(1) of the Act, such circumstances include:
1. 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; or
2. if the licensee contravenes or fails to comply with a requirement established under this Act;
Capitis has failed to meet its regulatory obligations under the Act and remains non-compliant with its filing requirements. Capitis failed to properly maintain a trust account, which is a fundamental requirement of a licensed mortgage administrator. This left lender/investor funds in jeopardy of mismanagement.
Capitis mismanaged funds when it paid lenders and investors before receiving funds from the borrowers, as it put other lenders and investors at risk if the borrower’s funds were not received. The comingling of operating and trust funds, coupled with this mismanagement does not afford confidence that Frost’s assertions that the administration of lenders and investors funds were properly dealt with are trustworthy.
Capitis refused to provide FSRA with adequate information on the mortgages under administration for FSRA to determine that reasonable arrangements have been made for the winding up or transferring of its administration business. Without this information, FSRA cannot determine whether it is in the public interest to allow Capitis to surrender its mortgage administrator licence.
Capitis is not suitable to be licensed because the past conduct of Frost affords reasonable grounds for the belief that the business of the corporation will not be carried on in accordance with the law and with honesty and integrity. Frost was subject to licence conditions, which he breached while engaged in mortgage brokering for Capitis’ business. Frost further contravened the Act by engaging in brokering outside TMACC.
Further, given the serious misconduct by Frost and Capitis, it is not in the public interest to allow Capitis to surrender its licence. As such, the Director has reasonable grounds for the belief that Capitis is not suitable to hold a mortgage administrator licence.

VII. GROUNDS TO IMPOSE COMPLIANCE ORDER

The Director is of the opinion that Capitis has committed an act or pursued a course of conduct that contravenes or does not comply with a requirement established under the Act.
As described above, Capitis contravened multiple requirements under the mortgage administrator standards of practice and carried on business in a manner not compliant with the Act. Frost was the directing mind of Capitis at the time and separately contravened the Act in his personal capacity.
The Director reasonably believes the compliance order against Capitis and Frost is necessary to remedy the non-compliance and to protect the investors and borrowers Capitis was administering mortgages for from harm or disruption associated with the proposed sanctions. The compliance order conditions will provide FSRA with information necessary to assess the ongoing concern regarding Capitis and allow FSRA to determine if lenders and investors are properly informed of their legal rights.

VIII. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

The Director is satisfied that imposing an administrative penalty on Frost under subsection 39(1) of the Act will satisfy one or both of the following purposes under subsection 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.
In determining the amount of the administrative penalty below, the Director has considered the following criteria as required by subsection 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.
The Director is satisfied that an administrative penalty of $50,000 should be imposed on Frost for repeatedly contravening section 2(3) of the Act by dealing in mortgages outside of his sponsoring brokerage. The administrative penalty will prevent Frost from directly benefiting from the contravention.
In respect of the first criterion, the Director is satisfied that Frost’s repeated misconduct was intentional. Frost knowingly and repeatedly brokered mortgages outside of his sponsoring brokerage. Frost was subject to supervisory conditions and intentionally withheld these mortgage transactions from TMACC while misleading investors into believing the transactions were being done through TMACC.
In respect of the second criterion, the Director is satisfied that Frost’s misconduct had the potential to cause serious harm to lenders, investors, and borrowers by failing to afford these individuals the protections of the Act.
Frost’s misconduct as a licensee under the Act also has the potential to harm public confidence in the regulatory regime established by the Act and its regulations.
In respect of the third criterion, the Director is unaware of any steps taken by Frost to remedy the contravention described in this proposal.
In respect of the fourth criterion, the Director is satisfied that Frost derived a direct economic benefit of at least $23,000 while acting outside of his authorizing brokerage.
In respect of the fifth criterion, Frost agreed to conditions placed on his licence following a consumer complaint dated July 25, 2023 for a period of two years. Additionally, FSRA issued an administrative penalty order of $1,750 against Frost on August 10, 2022 for providing false information on his licence renewal application.
The Director is satisfied, having considered all the circumstances, that the proposed amount of the penalty is not punitive in nature, and the amount is consistent with one or both purposes of section 38 of the Act.
Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, June 9, 2026

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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