$28K in penalties for B.C. mortgage broker who failed to disclose conflict of interest

A B.C. mortgage broker has agreed to pay more than $28,000 to a provincial regulator after admitting to conducting business “in a manner prejudicial to the public interest.”

A B.C. mortgage broker has agreed to pay more than $28,000 to a provincial regulator after admitting to conducting business “in a manner prejudicial to the public interest.” Alan James Fetterly made his admissions in a consent order agreement with the B.C. Financial Services Authority. The document was signed last month and a redacted version was published online last week .

The consent order stems from three instances in which Fetterly provided late disclosure statements to parties involved in real estate transactions in the Okanagan in 2022 and 2023. In one case, the Form 10 Conflict of Interest and Disclosure Statement Fetterly provided failed to mention that he was related to one of the co-lenders providing funding for the purchase of a Kelowna property. “Mr. Fetterly says he had verbally advised the borrower of the relationship, but failed to document it on the Form 10 due to administrative oversight,” the consent order reads.

Similarly, the Form 9 Investor/Lender Information Statement related to that property did not disclose one party’s beneficial ownership, according to the document. “Mr. Fetterly told BCFSA that he was unaware of the nature and extent of (the party’s) beneficial ownership interest at the time the mortgage was arranged,” it reads. Fetterly also claimed “administrative oversight” as the reason all of the disclosure forms were provided late, according to the consent order.

“None of the borrowers or lenders suffered any financial loss as a result of the late or incomplete disclosures,” the document reads. The consent order notes that Fetterly—who has been registered as a submortgage broker since 2017—does not have any previous discipline history with the BCFSA. A man by that name has come under the scrutiny of another provincial regulator in recent years, however.

Last August, the B.C. Securities Commission entered a settlement agreement with a mortgage broker named Alan James Fetterly over his brokering of a trio of “syndicated mortgages” between 2018 and 2024. A syndicated mortgage, according to the BCSC , is one in which two or more people participate as lenders, whether directly or indirectly. By brokering these mortgages, Fetterly triggered a requirement to register under B.C.’s Securities Act, but he did not do so.

In the settlement, he agreed to pay the regulator $30,000 to resolve his misconduct. In the BCFSA case, Fetterly agreed to pay a $20,000 fine and $8,370.38 in “investigative costs” to the regulator. “Mortgage brokers are held to a high standard for disclosures for a reason,” said Jon Vandall, the BCFSA’s senior vice-president for financial professionals, in a news release from the regulator.

“It’s vitally important that parties are aware of key required information so that they can make informed decisions. This broker didn’t live up to that standard.”