An order that is made regarding a licence holder reflects a situation at a particular point in time. The status of a licence holder can change. Readers should check the current status of a person’s or entity’s licence on the Licensing Link section of FSCO’s website. Readers may also wish to contact the person or entity directly to get additional information or clarification about the events that resulted in the order.


Ontario Coat of Arms
Financial Services
of Ontario

5160 Yonge Street,
Box 85
Toronto ON  M2N 6L9

REGARDING the Mortgage Brokerages, Lenders and Brokerages Act, 2006, S.O. 2006, c.29 (the “Act”), in particular sections 7, 19 and 21

AND REGARDING Mortgage Lenders Ltd.




Mortgage Lenders Ltd. (“Mortgage Lenders”) was issued a mortgage brokerage licence # 12330 on December 19, 2012 under the Act.

Section 19(1) of the Act provides that the Superintendent of Financial Services (“Superintendent”) may, in appropriate circumstances, revoke a mortgage brokerage licence. Section 21 of the Act provides that where the Superintendent proposes to revoke a licence, the Superintendent shall give written notice of the proposal to the mortgage brokerage, including reasons for the proposal.

Section 19(3) of the Act provides that, if in the Superintendent’s opinion the interests of the public may be adversely affected by any delay in the revocation of a licence as result of the steps required by section 21, the Superintendent may, without notice, make an Interim Order suspending the licence and may do so before or after giving the notice required by section 21.

The Superintendent is of the opinion that the interests of the public may be adversely affected by any delay in the revocation of Mortgage Lenders’ licence. The reasons are as follows:

  1. As is required by the Act, Mortgage Lenders has a principal broker in place who is also licenced under the Act (“Principal Broker”).

  2. Mortgage Lenders operates at the business address 5225 Orbiter Drive, Unit 12, Mississauga, Ontario, L4W 4Y8, which was formerly the business address of Terra Nova Financial Services Inc. (“Terra Nova”). The principal broker for Terra Nova was Ralph Iacono (“Iacono”).

  3. By Orders dated December 5, 2012, and effective December 8, 2012, the Superintendent revoked the mortgage brokerage and broker licences for Terra Nova and Iacono respectively.

  4. Iacono does not hold any of a mortgage brokerage, broker or agent licence under the Act and is not licensed to conduct mortgage business in Ontario.

  5. Shortly prior to or upon the revocation of Terra Nova’s licence, the book of business of Terra Nova was transferred to Mortgage Lenders. Mortgage Lenders continued the business formerly conducted by Terra Nova, including continuing to service the mortgage-related needs of Terra Nova’s former borrower and lender clients. Iacono is not a shareholder, director or officer of Mortgage Lenders.

  6. However, the Superintendent has information and evidence that the Principal Broker has, for several weeks or months, been a principal broker in name only, and that Iacono is acting as de facto principal broker of Mortgage Lenders and otherwise managing the brokerage. Iacono has unlawfully assumed control of Mortgage Lenders’ operations.

  7. Specifically the Superintendent has information and evidence in respect of the following:

    1. After ensuring that he, along with the Principal Broker, has signing authority on Mortgage Lenders’ bank accounts, Iacono assumed sole responsibility for signing cheques, opening and dealing with the operating accounts and dealing with Mortgage Lenders’ financial matters;

    2. Iacono attends at the Mortgage Lenders’ office regularly;

    3. Iacono attended meetings and engaged in business-related conversations with mortgage lenders, including both institutional and private lenders;

    4. Iacono discussed mortgages and mortgage-related matters with mortgage clients of Mortgage Lenders;

    5. Iacono comported himself within the brokerage as if he were in charge as the principal broker, including by bringing in mortgage business, assigning portions of the mortgage work to agents in the office, and engaging in supervision of those agents;

    6. Iacono’s name appears on a register of agents of the brokerage to whom commissions were paid;

    7. The Principal Broker informed Iacono that he no longer intended to continue in business with Iacono at Mortgage Lenders on or about July 15, 2013. On July 16, when the Principal Broker attended at Mortgage Lender’s premises, he discovered that he was locked out from the premises and that his email address had been removed from Mortgage Lenders’ email system;

    8. On July 17, 2013, Iacono filed an application with the Financial Services Commission of Ontario to attempt to change the Principal Broker by purporting to terminate the designated Principal Broker and designate another mortgage broker in his place. Iacono had and has no authority to act on Mortgage Lenders’ behalf for this purpose.

    9. On July 17, 2013, a FSCO investigator attended at Mortgage Lenders’ premises and observed that Mortgage Lenders’ offices were open to the public and that it appeared that its business operations are continuing.

  8. The Act requires that a brokerage shall designate a principal broker to exercise prescribed powers and duties in respect of a brokerage and that the principal broker shall exercise those powers and duties in accordance with the regulations (section 7(6)). Those powers and duties are set out in Regulation 410/07 and include the obligation to supervise the brokerage, its brokers and agents, ensuring that the brokerage and its brokers and agents comply with every requirement established under the Act. If the brokerage is a corporation, a principal broker must be an officer or director of the corporation.

  9. As outlined above, the listed Principal Broker does not have access to the brokerage or to the business of the brokerage and is unable to exercise his supervisory duty. The Superintendent has grounds to believe that Mortgage Lenders is operating without its named Principal Broker and is in fact doing business under the control of Iacono, an unlicensed person. Iacono also does not meet the requirement that the principal broker be an officer or director of the brokerage corporation, as he is neither. These factors cause risk to the clients of Mortgage Lenders.

  10. Further risk arises because on the basis of the above information and evidence the Superintendent has grounds to believe that Iacono is dealing in mortgages without a licence, on behalf of, and using the business vehicle of, Mortgage Lenders.

  11. The Act states that a person or entity is “dealing in mortgages” when he, she or it engages in  the following  activities, or holds themselves out as doing so:

    1. Soliciting another person to borrow or lend money on the security of real estate;

    2. Providing information about a prospective borrower to a prospective mortgage lender;

    3. Assessing a prospective borrower on behalf of a prospective mortgage lender;

    4. Negotiating or arranging a mortgage on behalf of another person or entity.

  12. Pursuant to section 2(2) of the Act, no person shall carry on the business of dealing in mortgages under the Act unless he, she or it has a brokerage licence or is exempted from the requirement to have such a licence.

  13. The Act at section 2(3) also states that “No individual shall deal in mortgages in Ontario for remuneration, whether direct or indirect, as an employee or otherwise, unless he or she has a mortgage broker’s or agent’s licence and is acting on behalf of a mortgage brokerage or is exempted from the requirement to have such a licence.”

  14. No exemptions apply in this case.

  15. Iacono’s activities as described above provide grounds to believe that Iacono is dealing in mortgages. The clients of Mortgage Lenders are at further risk because Iacono’s dealings with them are not within the sphere of the regulatory regime established by the Act.

  16. As long as the licence is not suspended, Mortgage Lenders continues to be authorized to deal or trade in mortgages for the public. Accordingly, the Superintendent is of the opinion that the public is at risk and will continue to be at risk until Mortgage Lenders licence is suspended or revoked.


It is ordered that Mortgage Lenders Ltd’s licence is immediately suspended, pursuant to section 19(3) of the Act.

During the suspension Mortgage Lenders is not authorized to carry on the business of mortgage brokering in Ontario.

Pursuant to section 17(3) of the Act, the licences of mortgage brokers and agents authorized by the mortgage brokerage to act on its behalf are also suspended when the brokerage’s licence is suspended. During the suspension of the licence of Mortgage Lenders, its brokers and agents are not authorized to carry on the business of mortgage brokering in Ontario.

The Interim Order takes effect immediately and will remain in effect until the expiry of the period for requesting a hearing about the Superintendent’s proposal to make a permanent order; or if before the end of such period the Superintendent does not give a notice of the proposal to make a permanent order, the Interim Order expires at the end of 21 days after the date of this Interim Order.

Pursuant to sections 48(4) and 49(1) and (2) of the Act, every person who fails to comply with an order made under this Act is guilty of an offence and every individual convicted of an offence under the Act is liable to a fine of not more than $100,000 or imprisonment for a term of not more than a year or both a fine and imprisonment. Every corporation convicted of an offence under the Act is liable to a fine of not more than $200,000.00.

Pursuant to section 48(5) of the Act, every director or officer of a corporation that commits an offence under this Act who directed, authorized, assented to, acquiesced in or participated in the commission of the offence, or who failed to take reasonable care to prevent the corporation from committing the offence, is guilty of an offence, whether or not the corporation is prosecuted or convicted.

Dated at Toronto, Ontario, July 29, 2013

Original Signed By

Philip Howell
Superintendent of Financial Services


© Queen's Printer for Ontario, 2013