The Financial Services Regulatory Authority of Ontario (FSRA) is the latest regulator to propose sanctions against Daniel George Gordon and Gordon Wealth Management Limited. In a notice of proposal to impose administrative penalties, the regulator proposes to impose administrative penalties of $133,500 against Gordon and another $150,000 in administrative penalties against his firm.
The reasons for proposal outline Gordon’s activities as the chief financial officer for pharmacy company, CMP, and allege that he and his firm used coercion or undue influence to secure insurance business.
Licensed as a life insurance and accident and sickness insurance agent since August 1997 until May 2022 when his license expired, Gordon was also a registrant with the Investment Industry Regulatory Organization of Canada (IIROC) since 2010. In June 2015 he became employed as a registered representative with Harbourfront Wealth Management Inc.
In May 2022, Gordon and IIROC reached a settlement agreement where Gordon agreed to a $80,000 fine, three-month suspension, remedial education and costs totalling $20,000.
In that settlement he admitted that he acted for CMP, generally advising on financial matters for the corporate client as the company’s CFO. Gordon’s relations with CMP began in the 2000s when the pharmacy opened an investment account with him. Starting in 2008 the company also began to purchase insurance products, as well. Beginning in 2014 Gordon was the CFO of CMP, managing banking, loans, payroll and cashflow.
After agreeing to cease being CFO, Gordon changed his job title to consultant, closed his CMP email, and continued working with the pharmacy company. In the last full year he was a consultant, he was paid $320,000 annually, plus at least $1,000 a month for non-specific expenses.
According to the reasons for proposal in the most recent case, between 2008 and when he ceased being a consultant with CMP in February 2020, CMP and its owners purchased 55 insurance policies with Gordon as the agent. Premiums for the policies purchased after he became CFO in 2014 substantially increased – in 2013 before Gordon joined CMP, premiums were roughly $329,000. By 2019 the company was paying premiums of $1,781,580.
The reasons document further adds that between 2008 and 2020 the company paid total premiums well over $7-million. Gordon generated $900,648 in commissions on the sales, most during his tenure as actual or de facto CFO of CMP. In addition, it is alleged that Gordon also hired an employee, but at the end of negotiation, after the employee had already quit their previous job, Gordon told the employee that he could not proceed with the offer of employment unless the employee had direct disability insurance, sold by Gordon. “He told a FSRA investigator that he did not feel there was another option other than purchasing disability and life insurance through Gordon to get the job,” FSRA writes.
CMP and its principal both made bankruptcy proposals in 2020. CMP was assigned into bankruptcy by its creditors in September 2020.
In addition to the coercion, FSRA is proposing to levy the administrative penalties for failing to disclose the outside business activity on insurance license renewal applications, for failing to disclose the IIROC investigation when asked and for failing to maintain errors and omissions insurance for 14 months at the end of his licensed career.
