Ontario’s broker regulator has revoked the license of Graydon David Cragg for breaching conditions of a 2010 order that required him to have an accountant at his brokerage verify the organization’s books and records.
Following a guilty plea from Cragg’s lawyer, a discipline committee of Registered Insurance Brokers of Ontario (RIBO) found Cragg guilty of misconduct for operating in a net trust deficit position on May 31, 2009, and for failing to maintain registered books and records.
Information filed by RIBO in a court appeal alleged that the brokerage’s net trust deficit was $122,492 between June 2008 and May 2009, and as at May 31, 2009. That figure is five years old, and it was not known at press time if the deficit had been reduced.
RIBO’s disciplinary committee issued an order in 2010 requiring Cragg to have an accountant provide written confirmation that his brokerage’s books were in order as of May 31, 2010, and at the end of 2011 and 2012. It changed his registration to “unrestricted technical,” preventing him from operating as a principal broker for two years.
Cragg appealed the committee’s decision to the Ontario Superior Court in 2011. He argued that the committee had misconstrued his guilty plea.
The Ontario Superior Court disagreed.(continued)#pb#
“The uncontroverted evidence before the committee was that the company was in a net deficit trust position on May 31, 2009, the date for which the appellants pleaded guilty,” the court wrote in its March 2011 decision.
The court also rejected Cragg’s assertion that RIBO exceeded its jurisdiction by requiring Cragg to verify his brokerage’s books annually for three years.
“In our view, the imposition of the requirement to file audited financial statements for three years, in the circumstances of this case, was not only within the sanctions available under section 18(5)(c), but was reasonable and within the range of penalties available,” the Ontario Superior Court found.
“The contraventions in the present case were serious and required severe sanctions. Each case will be adjudicated on its merits. Penalty is a matter of discretion that should not be lightly set aside. It was not only acknowledged that the appellant company’s books and records were in disarray, but that the appellant, Graydon David Cragg, personally took responsibility.”
After the appeal, Cragg had not provided RIBO with verification that his brokerage’s books were in order as of May 31, 2009, a RIBO order said late last year. His license is now revoked.
