Greater Victoria’s Gregory Martel and his company My Mortgage Auction Corp. — doing business as Shop Your Own Mortgage — have been suspended from acting as mortgage brokers.
The B.C. Financial Services Authority said it took the step after investigators obtained evidence indicating Martel and Shop Your Own Mortgage had conducted business “in a manner prejudicial to the public interest.”
The suspension orders take effect immediately, it said.
The B.C. Supreme Court is trying to find the whereabouts of $226 million in investments entrusted to Martel from what could be more than 1,200 investors.
It has ordered Martel to provide a list of assets, banking information, transaction information and documents for loans provided by investors to My Mortgage Auction
Pricewaterhouse Coopers has been appointed as receiver over My Mortgage Auction by the court.
Martel’s next court date is set for June 9.
The financial services authority said it determined that the time it would take to complete an investigation or a hearing while Martel and the company were still registered under the Mortgage Brokers Act would “present a significant risk to the public.”
Andrew Pendray, chief hearing officer with the the authority, imposed the interim suspensions while the authority completes its investigation, which is still in its early stages.
Preliminary results from that investigation indicate Martel misappropriated millions of dollars in bridge loan investment funds for personal benefit, failed to fulfill the terms of investment agreements, continued to seek new investments after already defaulting on existing loans, and failed to comply with multiple orders of the B.C. Supreme Court, Pendray said.
Martel first registered as a submortgage broker in December 2006. Shop Your Own Mortgage was also registered as a mortgage broker, with an expiry date of Dec. 5 of this year.
The B.C. Financial Services Authority said it began receiving complaints about Martel on April 5.
Concerns included Shop Your Own Mortgage issuing T5s listing interest on an investment, when the client had not, in fact, received any interest. Investors said the company failed to pay interest or return investments as promised.
Victoria police notified the authority that it had started an investigation into Martel and Shop Your Own Mortgage, Pendray said.
A letter from the lawyer representing My Mortgage Auction told the court that Martel was “out of the jurisdiction.”
Suspension orders make claims against Martel and his company that have not been proven, the financial services authority said.
The orders will remain in place while the authority finishes its investigation into Martel and the company and a decision is made following a hearing.
Suspensions can be appealed to the financial services tribunal.