A life agent had his license revoked and was fined $100,000 after the Financial Services Regulatory Authority of Ontario (FSRA) accused him of violating several industry rules, including operating a scheme that allowed a former agent to continue contacting clients and opting out of many of them. customers, among other violations.
The FSRA ordered Yogender Jain’s lifetime license to be revoked and imposed a $100,000 penalty on both Jain and his company, Gold Standard Group Inc. (her license expired in 2022).
In March, the regulator filed charges and proposed penalties against Jain and Gold Standard. They did not request a hearing to contest the allegations and were therefore subject to the proposed sanctions.
At the same time, the FSRA also filed charges and proposed penalties against another former agent, Daniel Tiffin. He applied for a hearing in the Financial Services Court and the allegations against him were not proven.
The sanctions against Jain and Gold Standard stem from allegations that they violated insurance rules by allowing Tiffin to conduct illegal insurance business and indirectly paid him compensation. Moreover, FSRA claims, Jain and Gold Standard converted these clients into new, segregated funds.
According to the regulator’s original notice of allegations, Tiffin’s lifetime driver’s license was not renewed in 2019 following his conviction in the Superior Court of Ontario for violating a trading cease and desist order imposed against him by the Ontario Securities Commission (OSC) in 2014..
The FSRA alleges that after Tiffin was convicted and his clients were referred to other agents, Gold Standard’s owner encouraged Jain to obtain a license and work with Tiffin.
As a result, the regulator said, Jain acquired 41 of Tiffin’s former Industrial Alliance (iA) customers. FSRA alleged that Jain began acquiring these clients by transferring them to new Canada Life Assurance Co. funds.
This activity was noticed by Jain’s management agency, which noted that he generated over $800,000 in commissions in 2019 and 2020, which is high for a new agent. Most of this business came from former Tiffin customers.
According to the regulator, Gold Standard allegedly split these commissions 50/50 with Tiffin and his company Global Demographics, which had the same address as Gold Standard (an unnamed person owns 80% of the company; Jain had the remaining 20% and was its sole officer) .
The FSRA also alleged that Tiffin continued to advise clients on segment funds.
“Clients generally reported that they viewed Tiffin as an ‘insurance advisor’ and Jain as a licensed individual who completed transactions with insurers,” the FSRA said.
In early 2021, iA and Canada Life filed reports with the FSRA regarding suspected misconduct by Jain and Gold Standard, including tampering and suitability violations.
For example, between November 2019 and December 2020, Jain transferred 41 customers from iA to Canada Life, which resulted in nearly $200,000 in deferred sales fees for those customers and generated more than $300,000 in commissions, the FSRA said.
“Jain was unable to provide a satisfactory explanation for the mass transfer of customers from iA to Canada Life and the incurrence of such significant DSC costs,” the FSRA said in its notice.
Additionally, all of these clients were placed in the same three Canada Life funds, the FSRA noted.
“Canada Life found that Jain investing his entire client base in just three funds indicated that he did not recommend funds that met clients’ individual needs. “They determined that Jain was apparently soliciting clients through funds using DSC schedules,” the FSRA said.
The FSRA added that “the director is satisfied that Jain and Gold Standard acted at least recklessly in inducing customers to put their segregated funds in iA in order to enter into another contract with Canada Life.”
The FSRA also found that Jain made “false or misleading statements or misrepresentations in obtaining and registering insurance” and that he “lied to the FRSA both in writing and during the interview about his involvement with Tiffin.”
