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BCFSA Issues Maximum Penalty to Former Mortgage Broker for Flagrant Disregard of Cease Order

BC Financial Services Authority has issued a penalty of $50,000 against former mortgage broker, Justin Phu Pham and his company, JP Elite Mortgage, for carrying on mortgage broker activities without being registered to do so as required under the Mortgage Brokers Act.

Pham’s mortgage broker registration expired on October 24, 2016, while JP Elite’s brokerage registration expired on December 19, 2016. After receiving three complaints following the expiry of Pham’s and JP Elite’s registration, BCFSA issued a Cease and Desist Order on December 22, 2017, requiring Pham and JP Elite to cease any mortgage broker activity while unregistered. However, both flouted these orders and continued to engage in unregistered mortgage broker activity. 

BCFSA’s investigation revealed that Pham had created and submitted multiple mortgage applications through the online mortgage platform (Filogix) using the credentials of two registered submortgage brokers with whom he had close relationships. Pham brokered at least six mortgage applications this way in 2017 and then ignored BCFSA’s Cease and Desist Order to arrange up to nine more applications in 2018.

“Mr. Pham and JP Elite simply chose to ignore the requirements of the regulatory regime for more than two years”, stated BCFSA’s Chief Hearing Officer, Andrew Pendray, in the decision. “Mr. Pham and JP Elite’s flagrant disregard of clear directions from the regulator to cease engaging in business as a submortgage broker and mortgage broker, is the type of behaviour that requires specific deterrence.”

In addition to showing disregard for the regulator, Pham’s unregistered activities caused real harm to his clients, leading to losses in excess of $40,000, while at the same time earning remuneration for himself.

BCFSA has issued the maximum penalty allowable under the Mortgage Brokers Act, which is appropriate given the scope of Pham’s and JP Elite’s actions. We will continue protecting the public by investigating and disciplining cases of misconduct to ensure only registered individuals who act in compliance with our regulatory regime provide mortgage services in BC.

In addition to the administrative penalty of $50,000, Pham and JP Elite are ordered to pay investigation costs in the amount of $13,300. Pham and JP Elite Mortgage may appeal the decision to the Financial Services Tribunal within 30 days.

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