Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A few months after the Ontario Securities Commission ordered a receiver to take control of Paramount Equity Financial Corp., which sold pooled mortgage products, the company’s chief executive officer, Marc Ruttenberg, asked one of his largest investors for an unsettling favour.

Mr. Ruttenberg invited Corey Rubinoff, a dentist whose family had poured $10-million into Paramount, to lunch one day in 2017. Mr. Ruttenberg asked Mr. Rubinoff if he could put his family’s home in Mr. Rubinoff’s name in order to shield it from creditors.

“I refused this request,” Mr. Rubinoff said, in an affidavit.

Story continues below advertisement

Three years later, Mr. Ruttenberg cannot be located by the Ontario Securities Commission, and the Rubinoffs have only been able to recover less than half of their investment. Mr. Rubinoff is one of 500 Paramount investors, most of whom are based in Ontario, wondering if they will ever recoup all of the $78-million, in total, they pumped into funds that were supposed to invest in residential second mortgages, but which the OSC alleges were frauds.

Mr. Rubinoff’s evidence is contained in affidavits that the OSC has accepted from six witnesses who were supposed to testify in person against Mr. Ruttenberg and two other former Paramount executives. When the COVID-19 pandemic forced the OSC to cancel all in-person hearings in March, the three-person panel adjudicating the case allowed OSC lawyers to make their case through written submissions, which the regulator has released publicly.

Only one of the former executives, Matthew Laverty, a senior vice-president, has responded to the witnesses’ sworn statements. Mr. Laverty has told the commission he intends to cross-examine two witnesses by video conference. That proceeding has not been scheduled.

Mr. Ruttenberg, who founded Paramount, cannot be located by the OSC. At one of the last in-person hearings in March, Mark Bailey, a senior OSC litigator, told the panel that when the regulator visited a house where Mr. Ruttenberg was believed to be residing, the person who answered the door said they didn’t know him. The only up-to-date contact information that the OSC has for Mr. Ruttenberg is a post-office box at a Toronto UPS store, Mr. Bailey said.

In addition to Mr. Rubinoff, the commission also heard from an expert witness, Leon Dadoun, whose career in finance included stints securitizing mortgages for the former Canada Trust and CIBC World Markets. At the request of the OSC, Mr. Dadoun analyzed several of Paramount’s transactions.

Paramount’s marketing material promised investors their money would be dedicated to second mortgages on single-family homes, and the company’s priorities were “capital preservation” and “fixed stable returns” for shareholders.

But the deals scrutinized by Mr. Dadoun showed their money was used for wildly different purposes: proposed developments, sometimes on raw, undeveloped land, of multiresidential apartment buildings.

Story continues below advertisement

Investors were also promised that Paramount’s loans would never exceed 85 per cent of the value of the properties – what is known as a loan-to-value ratio. But in four deals Mr. Dadoun examined, he found the loan-to-value ratio was 150 per cent or higher. In two instances, he couldn’t calculate a ratio because there weren’t any appraisals for the properties.

“I am completely surprised at the lack of policy, documentation and credit processes to properly assess the risks" with these multiresidential mortgages, Mr. Dadoun said in his affidavit. Mr. Dadoun also highlighted a conflict of interest in many of the loans: Mr. Ruttenberg had ownership stakes in many of the development companies that received Paramount money.

Mr. Dadoun also raised a concern about another common thread in several of the companies. Many had ties to Enzo Mizzi, a Toronto developer and construction company owner. The court-appointed receiver for Paramount, Grant Thornton Ltd., alleges that $50-million in Paramount mortgages went to companies linked to Mr. Mizzi, court records show.

“There also appears to be an extremely large and disproportionate exposure to loans involving counterparties related to a single individual, Enzo Mizzi," Mr. Dadoun stated in his affidavit. "This places the entire portfolio at material risk.”

Michael Simaan, a lawyer for Mr. Mizzi, declined to respond to Mr. Dadoun’s testimony, saying he needed to have access to all of the OSC’s case before he could comment. Mr. Mizzi had no role with Paramount and is not subject to the OSC proceeding.

Grant Thornton is suing Mr. Mizzi, alleging that he improperly diverted $18.8-million from Paramount-funded projects for his “personal benefit.” In his statement of defence, Mr. Mizzi denies “that there was any redirection or diversion of funds.” Any funds he or his companies received were for services disclosed to Paramount as part of the loan process, his statement of defence states.

Story continues below advertisement

Mr. Mizzi has also denied that he was aware of any of the representations Paramount made to investors about how their money was going to be deployed.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies