Dentons prepared a Report following a series of interviews. My comments appear in Italics.
Here are some statements directly relevant to the Registrar’s role:
According to the Registrar, the intention behind the Undertaking Agreement was to facilitate the sale of iPro assets, from which the sale proceeds would be used to recover the shortfall in the trust accounts, thereby making consumers and registrants whole.
Comment: Effectively, this makes good sense.
The Registrar had the authority to pursue the option of an undertaking agreement; however, in doing so, the Registrar deviated from RECO’s typical approach of a suspension order, freeze order, and request to revoke registration when dealing with and escalating matters involving misappropriation of trust funds by a registrant.
Comment: This is unfortunate, because that standard approach made sense, and would not have led to the current problems.
Notably, once the Registrar made this determination on May 19, 2025 to pursue an Undertaking Agreement as the appropriate response, he appears not to have considered other regulatory options available to RECO. We understand that this decision to pursue the Undertaking Agreement as the only regulatory response was not revisited, despite the fact that:
- the Registrar himself expressed concerns about the accuracy and completeness of information provided by iPro prior to the date the Undertaking Agreement was executed;
- other RECO staff had expressed concerns about the Registrar’s chosen approach; and
- the Undertaking Agreement was not executed for approximately eleven weeks after RECO’s on-site inspection at iPro ended on May 22, 2025.
The Registrar deviated from RECO’s standard process in responding to the shortfall in iPro’s trust accounts and did not commence a formal investigation.
Instead, the Registrar attempted an out-of-the-ordinary resolution that he explained was an attempt to prioritize financial recovery through the sale of iPro’s assets and goodwill.
Comment: This approach was foolhardy, but nevertheless would make some sense, if it could be achieved.
Our preliminary findings surfaced that RECO’s response to the iPro Matters was largely attributable to the unilateral and sheltered decision-making of an empowered Registrar who failed to leverage the advice, resources, and expertise of the teams that surrounded him.
Comment: That’s the negative way of calling out a true decision-maker. He was independent and made up his own mind, yet the suggestion here is that someone weak, at the top of RECO, would have been preferable.
We find that this situation was further exacerbated by an environment at RECO where other senior management often deferred to the Registrar.
Comment: Yes, and they should, after all, he’s the boss!
In this specific case, the Registrar’s deviation from RECO’s standard process also created a reasonable apprehension of bias given that one of the iPro principals, Mr. Rui Alves, previously sat on the RECO Board between 2019 and 2023. There was insufficient evidence to conclude that there was a personal relationship between Mr. Alves and the Registrar outside of the working relationship, nor did we find that the Registrar’s relationship with Mr. Alves as a former Board member influenced his decision-making. However, we find that the potential for, or possible perception of, a conflict of interest in this case should have led the Registrar to more closely follow RECO’s standard process to the iPro trust account shortfall and, further, to consult more broadly within RECO about the use of the Undertaking Agreement.
Comment: It looks like the Registrar while not favouring Alves,“trusted” him, and that was the actual downfall in this particular case.
The inclusion of a “non-prosecution” provision in the Undertaking Agreement, under which RECO agreed not to initiate provincial offences charges against iPro, Mr. Alves, or Mr. Colucci, risked undermining public confidence in RECO, particularly given the magnitude of the trust fund shortfall in the iPro trust accounts.
Comment: Actually, there’s no problem here. These provincial offences are minor under the legislation. This was a major theft. The Registrar turned the matter over to Peel Regional Police for prosecution under the Criminal Code. That was fine. That’s what should happen!
The decision to pursue the Undertaking Agreement was unilaterally made by the Registrar on May 19, 2025 at 7:29 p.m., in advance of RECO’s on-site inspection, and despite having been advised of the iPro trust account issues only twenty-one minutes earlier (at 7:08 p.m.).
Comment: No problem with that. The Registrar sounds like a decision-maker.
While staff members understand that the Registrar is afforded independence to make decisions under TRESA, staff tend to identify a distinction between independent decision making and providing guidance or considerations that are taken into account during the decision-making process.
Staff are generally of the view that the Registrar’s independent decision-making power does not preclude the Registrar from soliciting feedback and taking same into account when making decisions on files. However, in the iPro situation, we heard that the Registrar did not seek out or encourage feedback or advice on his decision to pursue the Undertaking Agreement instead of other available enforcement tools and, further, the Registrar was resistant to feedback provided by other RECO employees on whether the Undertaking Agreement was an appropriate response to the iPro trust fund shortfall.
The preponderance of the evidence demonstrates that the Registrar’s office was siloed. The Registrar intentionally kept the functions of the Regulatory Division generally, and the Registrar’s office in particular, separated from the rest of the organization. This resulted in the creation of a culture at RECO that isolated the Regulatory Division from other divisions at RECO. Members of the Senior Administrative Division and the Operations Division of RECO had difficulty obtaining information from the Regulatory Division generally and the Registrar in particular. Generally, there was a resistance within the Regulatory Division to provide individuals outside of the Regulatory Division with information.
Members of the RECO Board had been “grilling” the Registrar at RECO Board meetings on matters he was handling in an attempt to obtain further information regarding same. This grilling did not result in a disclosure of the iPro Matters by the Registrar prior to the execution of the Undertaking Agreement. The Registrar was experienced, strong-willed, intimidating and protective of his authority as a Registrar.
Comment: I would like to have a “decision-maker”. So far, so good. And, it looks like just about everyone at RECO had knowledge. This matter if the Undertaking Agreement were to be finalized had to remain confidential. However, that was also one of the big problems.
The CEO had been coaching the Registrar from December 2024 until approximately May of 2025 on how he engaged with employees and controlled the Registrar’s function. Despite coaching from the CEO, in our view and based on the preponderance of evidence received, the Registrar’s approach to his role and his colleagues had the effect of discouraging people from challenging the Registrar on his approach or raising their concerns to the RECO Board or other members of RECO’s senior management team.
Comment: There were two CEO’s, one that they are referring to here and another who was in place at the time of the investigation.
In this regard, we recommended that RECO develop a file review protocol wherein file review meetings are regularly held with representation across the various departments of RECO.
The staff members we interviewed recommended that during these meetings, issues with files are raised, and discussions ensue regarding:
(1) the potential impact of the issues raised on RECO;
(2) approaches regarding how the issues that are raised can be addressed;
(3) the options available to address the concerns raised; and
(4) anticipated overall direction to be taken in the circumstances.
Comment: Realistically, I would like to see a decision-maker, a person with real authority.
The purpose of such discussions is to provide staff with the opportunity to ask thoughtful, probing questions while allowing staff to develop an understanding of the impact points and the ultimate decision-making process that will be followed in the circumstances.
Comment: I don’t care about the staff. I would prefer a real boss at the top, and not a mouse!
As noted above, we heard that the Regulatory Division at RECO generally operated as a silo and, generally, there was a resistance within the Regulatory Division to provide individuals outside of the Regulatory Division with information.
In reviewing RECO’s response to the iPro Matters, we learned that the Registrar and Deputy Registrar of RECO worked with in-house legal support to negotiate the Undertaking Agreement. While RECO’s CEO had limited visibility on the matter, she was reliant on the Registrar’s updates and timing in relation to the iPro Matters. Although the CEO did ask the Registrar in late July 2025 whether the Board Chair should be advised of the iPro Matters, she was advised that nobody could be told until the Undertaking Agreement was signed.
Comment: It’s true that confidentiality would be required.
This meant that the RECO Board Chair did not learn of the iPro Matter, or the Undertaking Agreement until August 10, 2025 – two days after the Undertaking Agreement was executed. Further, the remaining Board members were not briefed on the iPro Matters until August 13, 2025.
We believe that this lack of visibility and oversight was caused by the Registrar’s misunderstanding of the scope of his statutory independence, which adversely impacted the Board’s legitimate oversight function.
Comment: The Registrar simply made a foolhardy mistake. He trusted Alves and went along with the delayed deal. But, in reality, I would still prefer to have a decision-maker in the role.
During the initial phase of our audit, we heard that
the Registrar was perceived within RECO as
experienced,
strong-willed,
intimidating and
protective of his authority.
Comment: seems like the characteristics of the boss!
Further, the Registrar exerted significant decision-making power both within the Regulatory Division and more broadly across RECO divisions, and staff from all divisions generally felt that they could not challenge the Registrar’s decision making authority.
Even in the limited cases where RECO staff did express concerns, some reported that they were either sidelined from active involvement in the iPro Matters or felt that the Registrar simply dismissed their concerns. We believe that the Registrar’s approach to his role and his colleagues had the effect of discouraging people from challenging the Registrar or raising their concerns to the RECO Board or other members of RECO’s senior management team about the decision to enter into the Undertaking Agreement with iPro and its principals. Based on this feedback, we believe that RECO could strengthen its internal whistleblowing policy.
COMMENT
Dentons will recommend lots of oversight. Let’s eliminate decisions by the person at the top.
However, let’s look to the Province. If they independently, decide to appoint an “administrator” to oversee RECO, we will have one single person in charge.
That’s always going to be a problem. Do you want true leadership? Or would you prefer everyone throwing in their two cents?
Brian Madigan LL.B., Broker