Agent to work under strict supervision for two years
The Financial Services Regulatory Authority (FSRA) has imposed strict conditions on a mortgage agent's licence after finding he failed to meet proper identity verification and fraud prevention standards.
Ontario’s financial regulator has granted Nexus Seulal a Level 1 mortgage agent licence, but under strict supervision for two years.
Despite FSRA's initial proposal to deny the licence, the Financial Services Tribunal directed the regulator to issue it with stringent conditions.
The decision comes after a 2021 investigation by Toronto-Dominion Canada Trust (TD) into Seulal's actions as a personal banking associate.
According to FSRA’s enforcement documents, Seulal violated TD's policies by opening multiple client accounts on the instructions of an unverified individual known only as "A.J." He allegedly opened bank accounts, issued access cards, and submitted credit card applications for 15 to 20 clients without properly confirming their identities in person.
Following this incident, in November 2022, the Ontario Securities Commission Compliance and Registrant Regulation Branch (CRRB) recommended refusing Seulal's registration as a dealing representative.
The CRRB said that Seulal's explanations during their interview were "not credible and unreasonable," and that he "minimized the seriousness of the concerns TD was investigating."
The CRRB concluded that "at a minimum [Seulal] did not act with the due care and diligence required by a banking professional in verifying customer identity, maintaining confidentiality of customer information, conducting due diligence, and identifying and preventing potential fraud."
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Under the new conditions set by FSRA, Seulal's licence will be subject to strict supervision for two years. Other requirements include:
- He will not be permitted to deal or trade in mortgages without supervision.
- Seulal must provide FSRA with the name and contact information of his potential supervisor, who must confirm their agreement to the conditions set by FSRA.
- The supervisor will review and approve every mortgage application Seulal is involved with to ensure compliance with brokerage policies and procedures.
- The supervisor will monitor all client interactions and submit quarterly reports to FSRA, confirming compliance with brokerage policies, the number of mortgages handled, and adherence to identity verification requirements.
- Seulal is prohibited from changing supervisors without FSRA's written approval.
- He will not be responsible for managing or supervising any licensed agents.
These measures aim to address the risks identified while allowing Seulal to work in the mortgage industry under close scrutiny.
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