It is unfortunate that RECO did not audit iPRO for several years and the Owners decided that since they were short of cash to use money from the Deposit Trust account and the Commission Trust account.
There is a cap on the amount that will be paid out by RECO’s insurer, $4 million for each account and then that’s it. Also, the maximum amount to be paid to a consumer is $200,000.00. I certainly hope that RECO will have a special assessment to make up the difference to the consumer.
When it comes to commissions, this will not likely be the case. The agents at iPRO will be the last to be paid. There won’t be enough money including insurance for everyone to be paid in full. Let’s hope you get at least 40% within the next 18 months.
Longer term solutions for RECO are simple:
1) more audits by RECO,
2) self-audits and submissions to RECO,
3) better back up insurance,
4) options for individuals to arrange and pay for full insurance on a file by file basis,
5) every Brokerage needs to secure a performance bond for deposits and commissions in the full amount.
Brian Madigan LL.B., Broker
Comments 1
Options 4 and 5 are dead to rights!