FSRA imposes administrative penalties against Kaleido Financial Ltd. and David Martino

The Financial Services Regulatory Authority of Ontario (FSRA) issued an order imposing administrative penalties in the total amount of $280,000 on Kaleido Financial Ltd. and $55,300 on David Martino.

Kaleido Financial Ltd. (Kaleido) was the mortgage brokerage on six syndicated mortgage investment projects brokered between 2016 and 2017. Kaleido did not use the correct amounts in the calculation of loan-to-value ratios in disclosures made to investors on two of the projects, contrary to section 43(1) of the Act. Kaleido also did not adequately identify conflicts of interest and did not adequately identify project-specific risks, contrary to sections 25 and 27 of Ontario Regulation 188/08. Kaleido Financial Ltd. further did not adequately document investors' suitability assessments in a way that demonstrated that an adequate suitability assessment was completed, contrary to section 24(1) of Ontario Regulation 188/08. Finally, Kaleido did not adequately maintain policies and procedures, contrary to sections 40(1), and 40(2) of Ontario Regulation 188/08.

David Martino was the mortgage broker on five of the six projects. As broker, he did not use the correct amounts in the calculation of loan-to-value ratios in disclosures made to investors on two of the projects, contrary to section 43(2) of the Act. David Martino also did not do, or omitted doing, actions that might reasonably be expected to result in Kaleido, as the brokerage, contravening or failing to comply with the Act, contrary to section 3 of Ontario Regulation 187/08.

David Martino was also principal broker at Kaleido from time to time. As principal broker, he did not adequately ensure compliance with the Act by Kaleido and other brokers and agents, contrary to section 2 of Ontario Regulation 410/07. David Martino also did not adequately review the policies and procedures of Kaleido and did not recommend changes to the policies and procedures to Kaleido, contrary to section 3 of Ontario Regulation 410/07.

FSRA issued this order as a result of a settlement between FSRA, Kaleido and David Martino.

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FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.

Learn more at www.fsrao.ca.

For media inquiries:

Russ Courtney
Sr. Media Relations and Digital Officer
Financial Services Regulatory Authority
C: 437-225-8551
Email: [email protected]