The rep's refusal to cooperate leaves staff unable to test $1.4 million in private loan allegations
A permanent ban from any dealer member of the Canadian Investment Regulatory Organization (CIRO), a $50,000 fine, and $20,000 in costs now stand against Neilay Modi, a former Toronto-area dealing representative who handed investigators none of the documents they asked for.
CIRO said in an August 27 enforcement notice that a hearing panel sitting under the Mutual Fund Dealer Rules found on August 21 that Modi failed to cooperate with an investigation into his conduct by CIRO staff.
The prohibition covers securities related business conducted while in the employ of or affiliated with any CIRO dealer member which said the panel's reasons for decision will be posted on the regulator’s website.
The investigation began with a July 8, 2024 report filed by Desjardins Financial Security Investments Inc. through the Member Event Tracking System (METS), CIRO enforcement staff wrote in their statement of allegations.
That report said Modi had failed to disclose two civil claims alleging he solicited private loans through his personal corporation and did not repay them, and that he had misrepresented an outside activity when he disclosed it and obtained approval.
Staff later received information alleging that between January 2017 and March 2022, before he was registered in the securities industry, Modi solicited roughly $1.4m from at least six individuals on the representation that the money would go into second mortgages or real estate, per the statement of allegations.
Civil proceedings filed in Ontario allege he failed to repay principal and interest under the respective loan agreements.
Modi is listed as the sole officer and director of 10000272 Canada Inc., incorporated on November 28, 2016 under the Canada Business Corporations Act, the statement of allegations says.
Desjardins approved that corporation as an outside activity in or around May 2022 after Modi said he was its sole investor, though he did not disclose that it operated as Nor-Star Financial Security.
Enforcement staff also allege he never disclosed a second corporation, 13518329 Canada Inc., in which he described himself to the dealer as one of nine incorporators and a minority shareholder.
One complainant, identified as SR, told Desjardins in July 2024 that he had invested $80,000 and that a second investor, SS, had invested $650,000 through Modi's corporation in private loans secured by real estate, according to the statement of allegations.
Desjardins advised staff on July 9, 2025 of a third civil claim naming Modi and the corporation.
Case assessment staff wrote to Modi between September and November 2024 seeking documents, information, and a response to the dealer's investigation report, the statement of allegations says, followed by further written requests between March and August 2025 that also sought an interview.
Staff warned him that enforcement proceedings could follow.
He produced nothing and did not attend an interview, enforcement staff wrote, leaving them unable to determine whether his statements to the dealer were false or misleading, whether he entered further loan agreements while registered, or whether he engaged in similar conduct with dealer clients.
Modi was registered in Ontario as a dealing representative with Desjardins from May 16, 2022 to July 25, 2024, when the firm terminated him.
He holds no registration in the securities industry in any capacity.
