FSRA imposes penalties and restrictions following false renewal application
The Financial Services Regulatory Authority of Ontario (FSRA) has fined licensed mortgage broker James Michalopoulos $10,000 and added conditions to his license.
The regulator found that Michalopoulos "provided false or misleading information" on his 2022 license renewal application. FSRA also stated that his past conduct and false statements on licensing applications demonstrate that he "is not suitable to be licensed without conditions."
The order follows a February decision by the Financial Services Tribunal, which supported FSRA in imposing the penalty and licensing conditions. FSRA had originally sought to deny Michalopoulos' license renewal entirely.
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“FSRA issued this order as a result of a decision of the Financial Services Tribunal (Tribunal) dated February 21, 2024,” the agency said in its media release. “The Tribunal directed FSRA to carry out its Notice of Proposal with respect to the administrative penalty and to issue the license with conditions. FSRA had proposed to refuse to renew the license.”
The financial watchdog recently revoked the licenses of 29 mortgage brokerages, prohibiting them from dealing mortgages in Ontario.
The brokerages failed to appoint a principal broker and/or neglected to file the required 2021 Annual Information Return (AIR), according to the financial services regulator’s news release. Ontario law requires all brokerages to have an assigned principal broker.
“A brokerage is not authorized to operate without a principal broker," said Wendy Horrobin, head of licensing and risk assessment at FSRA. “Having a PB and filing the AIR are fundamental requirements that ensure the integrity and credibility of those operating in the sector. It is important that consumer confidence and protection be maintained at all times."
Horrobin lamented the need to revoke licenses but stressed FSRA's commitment to compliance.
"It's unfortunate that FSRA must take the step of revoking licenses," she said. "However, we are confident that brokerages have been afforded multiple opportunities to comply without ever providing a response.”
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