Regulator takes aim at a private lender and administrator over alleged mishandling of mortgage funds
The Financial Services Regulatory Authority of Ontario (FSRA) has initiated enforcement action against Robert Brock Frost, a licensed mortgage broker based in Ontario, and Capitis Mortgage Investment Corp. (Capitis), the private lending company he founded, alleging off-book mortgage dealings and serious breaches in how the firm administered mortgage funds on behalf of clients.
In a notice of proposal issued by FSRA, the regulator alleges that Frost dealt in mortgages for remuneration outside of his registered mortgage brokerage, contrary to subsection 2(3) of the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA), the statute governing all licensed brokers, agents, and administrators in Ontario.
FSRA is proposing to refuse to renew Frost's mortgage broker licence, issue a compliance order against him, and impose a $50,000 administrative penalty.
Both Frost and Capitis have requested hearings before the Financial Services Tribunal, and the allegations remain unproven pending that process.
Ontario's financial services regulator has imposed $275,000 in administrative penalties against a former mortgage agent who conducted transactions outside her brokerage and facilitated a scheme orchestrated by a fugitive fraud suspect.https://t.co/xonTF3VAwz
— Canadian Mortgage Professional Magazine (@CMPmagazine) June 8, 2026
Company reported funding $100m+ in loans
Frost had publicly positioned himself as one of Canada's highest-performing private lenders and mortgage brokers, ranking in the top 1% of the profession from 2021 to 2023.
Through Capitis, incorporated and operating in Ontario, he marketed the company as a private mortgage investment and administration vehicle for investors seeking secured, fixed-income returns through mortgages funded to borrowers who cannot access conventional financing.
Capitis described having funded more than $100 million in loans and presented itself as a resource for borrowers when major financial institutions decline their applications.
Frost separately operated a financial coaching practice and maintained a significant real estate portfolio.
On the corporate side, FSRA alleges that Capitis contravened the MBLAA and its regulations in the operation of its mortgage administration business — specifically, that the company misused its trust account and mishandled mortgage funds, contrary to sections 23(1), 35, and 37 of Ontario Regulation 189/08.
Those provisions set out strict requirements for how mortgage administrators must segregate client funds in designated trust accounts, maintain detailed transaction records, and report accurately to FSRA on their financial affairs.
FSRA is proposing to refuse the surrender and revoke the mortgage administrator licence issued to Capitis, along with a compliance order.
Trust account obligations carry particular weight in Ontario's regulatory framework because they exist to protect investors and borrowers from commingling or misappropriation of funds they have advanced under the expectation of regulated oversight.
Part of a wider enforcement surge
The action against Frost and Capitis arrives during a sustained escalation of regulatory activity across Ontario's mortgage sector. In its fiscal 2024–25 cycle, FSRA initiated 100 enforcement actions, nearly double the 65 from the prior year.
The mortgage sector accounting for the largest share of administrative monetary penalties totalling approximately $1.2 million, according to FSRA's first Enforcement Annual Report, released in March.
Earlier in 2026, FSRA proposed $155,000 in penalties against Iqbal Singh Saini and related parties for dealing in mortgages outside an authorising brokerage.
In a separate action, the regulator imposed $600,000 in administrative penalties on former broker Claire Drage — among the largest administrative monetary penalties FSRA has imposed against a single broke — after finding a "prolonged and extensive pattern of misconduct" that left private investors facing significant losses.
Joe Sammut, broker of record at Mortgage Architects – A Better Way in Ontario, told Canadian Mortgage Professional in March 2026 that the regulator's increased transparency around enforcement was long overdue.
"I've seen more cases against bad actors in the last 12 to 18 months than in previous years," he said.
"They seem to be clamping down and cleaning up, and they're making sure the fines they're enacting on people are publicized."
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