The Ontario Securities Commission has denied registration to a former mutual fund sales rep, citing troubles he ran into with his insurance business.

Sahil Celly sought registration as a mutual fund salesperson at Royal Mutual Funds Inc. Celly was registered as a mutual fund rep from March 14, 2003 until his termination effective Sept. 30, 2003, sponsored by Clarica Investco Inc. Over the same period, Celly was licensed as a life insurance agent sponsored by Clarica Financial Services Inc.

Celly was terminated in good standing by Clarica, but he was terminated for cause by CFSI. The notice of termination filed by CFSI indicated he was terminated for the following reasons: conflict of interest, inducement, misrepresentation, money laundering, and illegal sales practices. He had agreed not to reapply for licensing as an insurance agent for a period of five years, in a settlement with the Superintendent of Financial Services.

The activities that led to his regulatory troubles on the insurance side related to his dealings with Mustava Khan and Zivota Mihajlovic. Celly entered into a referral agreement with Mihajlovic, believing that Mihajlovic was appropriately licensed as an insurance agent.

As a result of this referral relationship, Celly engaged in some activities that were not in accordance with insurance regulations, such as, not witnessing the client signatures on the policies. This arrangement also led to a significant increase in his sales. In September 2003 he sold policies resulting in a commission of $160,000 where the commission for the previous months had ranged from $5,000 to $10,000.

The large increase in sales led to a review by CFSI and the subsequent termination.