Administrative monetary penalty on Hub Capital Inc.
From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
[2025-06-12]
Hub Capital Inc., an independent wealth management firm in Woodbridge, Ontario, considered as a securities dealer, was imposed an administrative monetary penalty of $99,000 on March 21, 2025, for committing 4 violations. The violations were found during the course of a compliance examination in 2023. The administrative monetary penalty has been paid in full and proceedings have ended.
Nature of violation
- Violation #1
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Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(b)
FINTRAC determined that Hub Capital Inc. did not document and apply the necessary measures in its compliance policies and procedures to meet all of its obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.
FINTRAC’s examination determined that Hub Capital Inc. did not sufficiently develop and document its compliance policies and procedures in relation to reporting and know your client requirements. Also, Hub Capital Inc. had insufficient ongoing monitoring measures for its business relationships. Furthermore, the reporting timeframes and process for submitting suspicious transactions or attempted suspicious transactions and terrorist property reports were lacking or not accurately documented. Finally, its policies and procedures did not reflect measures to address the requirements under the Ministerial Directive on the Democratic People’s Republic of Korea (DPRK) published on December 9, 2017.
Violation #1 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Violation #2
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Failure of a person or entity to assess and document the risk of a money laundering offence or a terrorist activity financing offence, taking into consideration prescribed factors – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, subsection 9.6(2) and Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(c) and subsection 156(2)
Hub Capital Inc.’s risk-based assessment was incomplete as it did not thoroughly assess and document the money laundering and terrorist financing risks related to clients and business relationships, products and delivery channels, and geographic locations. In addition, the risk assessment did not document an adequate methodology for the assessment of its money laundering and terrorist activity financing risks, nor did it include a rationale to support the risk levels determined by the organization.
Violation #2 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Violation #3
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Failure of a person or entity that has employees, agents or mandataries or other persons authorized to act on their behalf to develop and maintain a written ongoing compliance training program for those employees, agents or mandataries or persons – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(d) and (e)
Hub Capital Inc.’s compliance training program was incomplete because it did not address certain requirements, such as ministerial directives, ongoing monitoring and terrorist property reporting requirements. In addition, the training program failed to include a detailed plan that accurately outlines all the available training methods and the training frequency.
Violation #3 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
- Violation #4
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Failure to institute and document the prescribed review – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(f) and subsection 156(3)
Hub Capital Inc. failed to adequately institute and document the prescribed review of its policies and procedures, risk assessment and training program. Specifically, the scope of the prescribed review did not cover the ongoing compliance training program. Furthermore, the prescribed review did not specify how the organization ensured that its compliance program was tested for effectiveness, nor did it demonstrate the conclusions of their review and how the deficiencies identified from previous effectiveness reviews were addressed.
Violation #4 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
Related link
- Date Modified: