Agent received remuneration outside authorized brokerage, provided false or misleading information during licence renewal process, says FSRA
The Financial Services Regulatory Authority of Ontario (FSRA) has issued a Notice of Proposal to impose administrative penalties totaling $34,000 and heightened supervision conditions on a licensed mortgage agent, citing multiple violations.
The FSRA noted that the agent, James Hooker, committed multiple breaches of the Mortgage Brokerages, Lenders and Administrators Act, 2006.
The penalties include $30,000 for receiving remuneration outside his authorized brokerage and $4,000 for providing false or misleading information during his licence renewal process. Additionally, the FSRA has proposed imposing a two-year supervision condition on Hooker’s mortgage agent licence.
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Breaches of brokerage and licensing rules
The FSRA detailed four separate mortgage transactions conducted by Hooker between March and September 2021, during which he directly received remuneration totaling approximately $21,425.
These transactions were not processed through his authorized brokerage, Cashin Mortgages Inc. (CMI), as required under the act, according to the government agency.
Hooker’s independent contractor agreement with CMI stipulated that all transactions must be conducted through the brokerage to ensure coverage under CMI’s errors and omissions (E&O) insurance. Despite these terms, the FSRA found evidence that Hooker and another agent, Eli Benzaquen, bypassed CMI in four mortgage deals, receiving direct payments from clients or third parties.
For instance, in one case known as the "MP First Mortgage," Hooker received a $3,500 fee directly from the transaction’s lawyer, which was not disclosed to CMI. Similarly, in the "CH Mortgage," Hooker received $2,925 from a financial service fee of $5,850 that was not processed through the brokerage.
“Hooker intentionally failed to disclose information relating to the mortgages he was dealing in to CMI. He purposely negotiated and accepted remuneration for four mortgage transactions outside the brokerage in order to increase his compensation by concealing these transactions from his brokerage,” said Elissa Sinha, director, Litigation and Enforcement, at FSRA.
False or misleading information
The FSRA also alleges that Hooker provided false information on his 2022 and 2023 licence renewal applications by denying he had been terminated for reasons including “theft, dishonesty or falsifying records.” The FSRA asserts that Hooker’s termination from CMI on Oct. 1, 2021, was explicitly due to such conduct, a fact he omitted in his applications.
Under sections 45(1) and 45(2) of the Act, providing false or misleading information to the FSRA or its Chief Executive Officer constitutes a breach. The FSRA emphasized that Hooker’s omissions undermine the integrity of the licensing system.
The FSRA acknowledged that while Hooker demonstrated cooperation during the investigation and his infractions were limited to one brokerage, his conduct raised significant concerns about his suitability to operate independently as a mortgage agent.
“This past conduct provides reasonable grounds for belief that, without additional supervision, Hooker may not process mortgage transactions as required under the Act and regulations,” Sinha said.
Hooker has the right to request a hearing before the Financial Services Tribunal within 15 days of receiving the Notice of Proposal. If no hearing is requested, the penalties and conditions will be finalized as proposed.
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