Interim Compliance Order Against JCT Capitol Investment Group Ltd. and Joseph Tukacs

REGARDING the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29 (the "Act"), in particular sections 2 and 35

 

AND REGARDING JCT Capitol Investment Group Ltd. and Joseph Tukacs

INTERIM COMPLIANCE ORDER

 

Sections 35(1) and (2) of the Act provide that if, in the opinion of the Superintendent of Financial Services ("Superintendent"), a person or entity is committing any act or pursuing any course of conduct that contravenes or does not comply with a requirement established under this Act, or has committed or pursued any course of conduct that contravenes or does not comply with a requirement established under this Act, the Superintendent may propose to order the person or entity to cease committing an act or cease pursuing a course of conduct identified by the Superintendent or to perform such acts as, in the Superintendent’s opinion, are necessary to remedy the situation.
 
Section 35(3) of the Act provides that where the Superintendent proposes to make such an order, he shall give written notice of the proposal to the person or entity, including reasons for the proposal.
 
Section 35(7) of the Act provides that, if in the Superintendent’s opinion the interests of the public may be adversely affected by any delay in making an order as result of the steps required by section 35, the Superintendent may, without notice, make an interim order and may do so before or after giving the notice required by section 35(3).
 
In the Superintendent’s opinion, the interests of the public may be adversely affected by any delay in making a compliance order against JCT Capitol Investment Group Ltd. ("JCT Capitol")  and Joseph Tukacs ("Tukacs") for the following reasons:
 
  1. The Act states that "No person or entity shall carry on the business of dealing in mortgages in Ontario unless he, she or it has a brokerage licence or is exempted from the requirement to have such a licence" (section 2(2)).
  2. 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."
  3. No exemptions apply in this case.
  4. Mr. Tukacs does not hold a mortgage broker’s or agent’s licence, nor has he ever held any of these licences.
  5. JCT Capitol does not hold a mortgage brokerage licence, nor has it ever held a mortgage brokerage licence.
  6. The Superintendent has received information and evidence that Mr. Tukacs and JCT Capitol are holding themselves out as dealing in mortgages in Ontario, as set out in the following paragraphs.
  7. Mr. Tukacs and JCT Capitol are dealing in mortgages in Ontario through a website, jctcapitol.com.
  8. Mr. Tukacs and JCT Capitol are also dealing in mortgages in Ontario through another website, linkedin.com. Mr. Tukacs' linkedin.com page can be found at: http://www.linkedin.com/pub/joseph-tukacs/35/459/8b9 [New Window]
  9. Mr. Tukacs and JCT Capitol are also dealing in mortgages in Ontario through a third website, facebook.com, on a page dedicated to JCT Capitol Investments Ltd.
  10. On January 22, 2014, Financial Services Commission of Ontario ("FSCO") contacted Mr. Tukacs by email, alerting him that it had come to FSCO’s attention that Mr. Tukacs and JCT Capitol were carrying on the business of dealing in mortgages in Ontario without being licensed under the Act.
  11. On January 24, 2014, Mr. Tukacs replied via email, stating that he and JCT Capitol would update their website and associated facebook.com and linkedin.com pages within 30 days to clarify that they only do business through licensed brokerages, brokers and agents. As of March 5, 2014, those changes had not been made, nor had steps been taken to remove any and all statements or representations on the website and other internet pages that constitute, or by which Mr. Tukacs and JCT Capitol hold themselves out as, "dealing in mortgages in Ontario" as defined by the Act.  
  12. Accordingly, the Superintendent has grounds to believe that Mr. Tukacs and JCT Capitol are dealing in mortgages in Ontario without being licensed under the Act.
  13. 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:
  • Soliciting another person to borrow or lend money on the security of real estate;
  • Providing information about a prospective borrower to a prospective mortgage lender;
  • Assessing a prospective borrower on behalf of a prospective mortgage lender;
  • Negotiating or arranging a mortgage on behalf of another person or entity.
  1. Accordingly, on the basis of the above information and evidence, the Superintendent also has grounds to believe that Mr. Tukacs and JCT Capitol are dealing in mortgages without a licence and are actively soliciting new business. Members of the public are at risk because Mr. Tukacs and JCT Capitol’s activities are not within the sphere of the regulatory regime established by the Act.
  2. For the above reasons, the interests of the public may be adversely affected by any delay in making a compliance order against JCT Capitol Investment Group Ltd. and Joseph Tukacs.
 

INTERIM ORDER 

It is ordered that Joseph Tukacs and JCT Capitol Investment Group Ltd.:

 
  1. Immediately cease in Ontario soliciting persons or entities to borrow money on the security of real estate or holding themselves out as doing so;
  2. Immediately cease in Ontario providing information about a prospective borrower to a prospective mortgage lender or holding themselves out as doing so;
  3. Immediately cease in Ontario assessing a prospective borrower on behalf of a prospective mortgage lender or holding themselves out as doing so;
  4. Immediately cease in Ontario negotiating or arranging a mortgage on behalf of another person or entity or holding themselves out as doing so;
  5. Immediately cease in Ontario accepting any fees or funds in connection with the solicitation, negotiation, or arrangement of a mortgage;
  6. Immediately cease holding themselves out as able to deal in mortgages, including deactivating the website jctcapitol.com and associated  facebook.com and linkedin.com pages described above, or altering those pages such that they cease to be in non-compliance with the Act; and
  7. Not communicate with existing clients for a purpose related to dealing, trading, lending or administering mortgages or carrying on any mortgage brokering business, except for the express purpose of transferring their files and business to a licensed broker, agent and/or brokerage.
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 $100,000.00 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.
 
Section 48(6) provides that every partner of a partnership and every individual who is a member of the directing body of an entity, other than a person or partnership, who directed, authorized, assented to, acquiesced in or participated in the commission of an act or omission by the partnership or entity which, if committed by a person, would be an offence under the Act, is guilty of an offence.
 
 
DATED at Toronto, Ontario, March 7, 2014.
 
 
Original signed by "Philip Howell"                                               
 
 
Philip Howell
Superintendent of Financial Services
 
 
TO:   

Joseph Tukacs

157 Magnificent Way

Binbrook, ON  L0R 1C0

 
AND TO:      

Joseph Tukacs

3 Seneca St.

Cayuga, ON  N0A 1E0

 
AND TO:  
JCT Capitol Investment Group Ltd.

Tel. (289) 237-9006

 
AND TO:      

Rory Johnston

Legal Counsel

Financial Services Commission of Ontario

5160 Yonge Street, Suite 1700

Toronto ON  M2N 6L9

Tel: 416.590.7205

Fax: 416.590.7556

Email: Rory.Johnston@fsco.gov.on.ca