Bankrupt ex-advisor fined $50,000 for unapproved sales

Former MFDA dealing rep sold mortgage investments totalling $434,700 to three clients

Bankrupt ex-advisor fined $50,000 for unapproved sales

A bankrupt former advisor has been fined $50,000 for engaging in unapproved securities-related business and selling mortgage investments totalling $434,700 to three clients.

Glen Lawrence Gomes was registered as a dealing rep from 2013 to 2017 with Investia Financial Services until he was terminated on March 31. He is not currently registered in the securities industry.

The MFDA requires that Approved Persons only offer approved investment products to its clients and that all products be sold only through the member.

However, between 2012 and 2015, Gomes had an arrangement with Tier 1 Transaction Advisory Services, a real estate and development company that offered investments in syndicate mortgages. Its projects included Vaughan Crossings and Memory Care Oakville.

Between October, 2013, and May, 2014, the respondent facilitated the aforementioned sales to three clients: $189,000 (Vaughan Crossings); $126,300 (Vaughan Crossings); and $119,400 (Memory Care Oakville). Gomes earned $34,344 in fees from these sales, which were not disclosed to his firm and not investments approved by the firm to sell.

Prior to the completion of the projects, the clients stopped receiving their distributions. Receivers were brought in to recover their money. The MFDA hearing said the likelihood of the clients getting back their full investment is not known at this stage.

One client commenced a lawsuit against Gomes and Investia, which is ongoing. One client complained, received compensation and her complaint is settled.

Between January 13, 2013, and March 31, 2017, Gomes also obtained and possessed four pre-signed account forms in respect of three clients. He also altered two account forms in respect of a client without having the client initial the alterations.

The settlement details how Gomes filed for bankruptcy in November, 2017. At the time he reported assets of $7,002 and outstanding liabilities of $684,900 owed to the Canada Revenue Agency.

He must pay costs of $9,462.50.