On January 29, 2025, the Financial Markets Administrative Tribunal (the TMF) found that Ms. Alteon Senat, a representative of a mutual fund dealer and representative in insurance of persons, breached multiple provisions of the Securities Act (the QSA), the Act respecting the distribution of financial products and services (the ADFPS) and the Code of Ethics of the Chambre de la sécurité financière by inviting clients to invest with her in the purchase of condominium units or rental properties for the express purpose of generating a return through their lease or sale.[1]

The TMF held that:

  • the joint purchase of condominium units or rental properties for the purpose of generating a return by renting or selling it qualified, under the QSA, as a “distribution” of an “investment contract”[2]
  • the fact that the underlying asset to the investment contract was an immovable had no bearing as it was not being acquired to be inhabited but rather to generate a return
  • as Ms. Alteon Senat had failed to prepare, file with the AMF and remit a prospectus to her clients in connection with the joint purchase of condominium units or rental properties and did not possess the required registration to effect such distributions, she was in breach of the QSA
  • Ms. Alteon Senat was also found to have placed herself in a conflict of interest situation with one client whom she had helped renegotiate her mortgage on her duplex in order to free up sums to be used for the joint purchase of a condominium unit, thereby breaching the ADFPS and the Code of Ethics
  • as a trained professional active in the financial markets, Ms. Alteon Senat could not ignore that her restricted registrations as a representative of a mutual fund dealer and in insurance of persons did not allow her to distribute investment contracts

The TMF sanctioned her by essentially barring her from the industry for 5 years, imposing an administrative penalty of $20,000, annulling the investments contracts with her clients and ordering the return to these clients of the sums they had advanced.

[1] 2021 QCTMF 31 (CanLII)

[2] A contract whereby a person, having been led to expect profits, undertakes to participate in the risk of a venture by a contribution of capital or loan, without having the required knowledge to carry on the venture or without obtaining the right to participate directly in decisions concerning the carrying on of the venture