Caitlin Eloise Gossage
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED AND IN THE MATTER OF THE REGISTRATION OF CAITLIN ELOISE GOSSAGE
SETTLEMENT AGREEMENT
I. INTRODUCTION
1. This settlement agreement (the Settlement Agreement) relates to the registration under the Securities Act (Ontario) (the Act) of Caitlin Eloise Gossage (Ms. Gossage), chief compliance officer (CCO) of Forthlane Investment Management Inc. (Forthlane).
2. Integrity is a foundational requirement for registration as a CCO under the Act. Conduct which brings a CCO's integrity into question must be investigated and regulatory action appropriate to the circumstances must be taken.
3. In this case, Ms. Gossage self-reported conduct in the National Registration Database which brings her integrity into question. However, Ms. Gossage also presented detailed and credible evidence to the staff of the Compliance and Registrant Regulation Branch of the Ontario Securities Commission (CRR Branch) respecting the mental illnesses that she suffered from when the conduct took place, and the concrete steps she has taken over the past three years to address her illnesses. Ms. Gossage has also provided independent evidence of her rehabilitation.
4. As a result, the CRR Branch has recommended to the Director that regulatory action be taken against Ms. Gossage requiring terms and conditions to be attached to her registration, while taking into account the mitigating factor of her rehabilitation. Pursuant to section 31 of the Act, Ms. Gossage would be entitled to an opportunity to be heard (an OTBH) pursuant to section 31 of the Act in respect of Staff's recommendation. However, in lieu of an OTBH, the CRR Branch and Ms. Gossage have agreed to make a joint recommendation to the Director regarding Ms. Gossage's registration, as more particularly described in this Settlement Agreement.
II. AGREED STATEMENT OF FACTS
5. The parties agree to the facts as stated herein.
A. Gossage's Registration History
6. Ms. Gossage was registered as a chief compliance officer in the categories of investment fund manager, portfolio manager and exempt market dealer, with the following registered firms:
(a) August 26, 2016 to May 10, 2018: BMO Asset Management Inc.;
(b) June 6, 2018 to August 21, 2020: Purpose Investments Inc.;
(c) July 26, 2018 to August 21, 2020: Purpose Investment Partners Inc.;
(d) October 23, 2020 to present: Forthlane.
7. Since October 23, 2020, Ms. Gossage has been the CCO for Forthlane, a registrant in the categories of investment fund manager, portfolio manager and exempt market dealer.
B. Proceeding taken by the Law Society of Ontario
8. On April 29, 2021, the Law Society of Ontario (Law Society) commenced a proceeding against Ms. Gossage, alleging that she had engaged in conduct which was unbecoming a barrister and solicitor. In particular, the Law Society alleged that Ms. Gossage had filed 106 false benefit insurance claims while employed with BMO Asset Management Inc., between January 2014 and June 2017. The total amount improperly claimed was $9,744.58. For part of that period of time, from August 2016 to June 2017, Ms. Gossage was the CCO for BMO Asset Management Inc.
9. Ms. Gossage had voluntarily resigned from BMO Asset Management Inc. in May 2018 to accept the position at Purpose Investments Inc. The benefit provider requested repayment from Ms. Gossage in July 2018. In August 2018, Ms. Gossage repaid the amount requested by the insurer.
10. BMO Asset Management Inc. conducted its own investigation in early 2019 into Ms. Gossage's conduct and Ms. Gossage cooperated with that investigation.
11. Ms. Gossage self-reported her conduct to the Law Society on May 8, 2019 and cooperated with the Law Society's investigation. The Law Society commenced its proceeding against Ms. Gossage on April 29, 2021.
12. In 2022, Ms. Gossage entered into an Agreed Statement of Facts with the Law Society respecting the false benefit claims to resolve the April 29, 2021 proceeding.
13. The Law Society Agreed Statement of Facts states that in the opinion of Ms. Gossage's psychologist, Dr. Robin Foster (Dr. Foster), Ms. Gossage was suffering from mental health disorders which negatively impacted Ms. Gossage's ability to employ sound judgement during the period when she submitted the false insurance claims.
14. Ms. Gossage has advised the CRR Branch that she first sought treatment from Dr. Foster in September 2019 and remains under Dr. Foster's care.
15. According to Dr. Foster's report of January 2022, Ms. Gossage's mental health disorders led her to engage in self-sabotage and maladaptive coping strategies which were highly atypical behaviours for Ms. Gossage. These mental health disorders arose from traumatic events that occurred during the two years prior to Ms. Gossage filing the first false insurance claim.
16. In her report, Dr. Foster expressed the opinion that Ms. Gossage is not at risk of engaging in similar behaviour in the future.
17. Ms. Gossage expressly admitted that she had engaged in conduct unbecoming a barrister or solicitor in the Law Society Agreed Statement of Facts.
18. Ms. Gossage and the Law Society jointly submitted that the appropriate disposition of this matter was to permit Ms. Gossage to surrender her membership in the Law Society.
C. Hearing before the Law Society Tribunal
19. A panel of the Law Society Tribunal (the Tribunal) heard the Law Society proceeding, including the Agreed Statement of Facts, on April 21, 2022 and issued its reasons for decision on July 18, 2022.
20. The Tribunal accepted the joint submission of the parties and permitted Ms. Gossage to surrender her membership with the Law Society, which Ms. Gossage has done.
21. The Tribunal noted the letters of support submitted by Ms. Gossage, which have also been provided to the CRR Branch. These letters all state that Ms. Gossage's conduct in relation to the insurance claims was highly out of character for her.
22. The Tribunal also noted the remorse expressed by Ms. Gossage, which was also noted by those who wrote her letters of support, and Dr. Foster.
23. The Tribunal noted that in Dr. Foster's opinion Ms. Gossage has developed insight into why she engaged in the misconduct and has developed tools that she can use in the future to deal with any stressful or traumatic incidents in the future.
24. The Tribunal also found that for Ms. Gossage, specific deterrence and rehabilitation had already been achieved.
D. CRR Branch Review
25. Ms. Gossage self-reported the Law Society proceeding to the CRR Branch on NRD and following the surrender of her membership and her licence to practice law, she was interviewed under oath by the CRR Branch.
26. Ms. Gossage also admitted to her misconduct to the CRR Branch. Ms. Gossage did not provide the information respecting her mental illness to the CRR Branch as an excuse for her conduct, but as context for her behaviour.
27. Ms. Gossage expressed remorse for her actions and regrets her misconduct. Ms. Gossage described to the CRR Branch the effort she has put into ensuring that she will not behave in a similar manner if she is faced with traumatic events again in the future.
III. ADMISSIONS AND REPRESENTATIONS BY GOSSAGE
28. Ms. Gossage admits that she submitted 106 false insurance claims to her employer's insurer while suffering from then undiagnosed and untreated mental illnesses.
29. Ms. Gossage represents as follows:
(a) she takes full responsibility for her actions and regrets her misconduct;
(b) she has sought treatment for her mental illnesses, that treatment has been successful in helping her to understand her conduct so as to prevent its recurrence, and she is continuing to be under the care of a mental health professional;
(c) she has suffered reputational harm as a result of this misconduct and has had to give up her licence to practice law;
(d) she is no longer at risk of engaging in conduct which brings her integrity into question and, as noted by the Law Society Tribunal, her rehabilitation has already been achieved.
IV. JOINT RECOMMENDATION TO THE DIRECTOR
30. In order to resolve the matter of the Application, and on the basis of the Agreed Statement of Facts and the Admissions and Representations by Ms. Gossage set out in this Settlement Agreement, the CRR Branch and Ms. Gossage make the following joint recommendation to the Director:
(a) Ms. Gossage will:
(i) successfully complete the Osgoode Certificate in Regulatory Compliance and Legal Risk Management for Financial Institutions on or before June 30, 2023; and
(ii) enter into a mentorship agreement for a minimum of one year with a more senior compliance professional (the Mentor) who shall be approved in writing by a Deputy Director or Manager in the CRR Branch (the OSC Manager); and
(iii) meet with the Mentor at least once every three months and will provide a summary of the items discussed with the Mentor to the OSC Manager following each meeting.
(b) These terms and conditions will remain on Ms. Gossage's registration under the Act for a minimum of one year.
31. The Parties submit that their joint recommendation is reasonable, having regard to the following factors:
(a) Ms. Gossage has recognized and acknowledged her misconduct, and has provided detailed assurances to the CRR Branch that she will conduct herself appropriately in the future, including an assurance from her treating psychologist;
(b) The joint recommendation requires Ms. Gossage to obtain additional education respecting her professional responsibilities as a registrant;
(c) The joint recommendation also requires Ms. Gossage to receive guidance from a more senior compliance professional for a minimum of one year;
(d) The terms and conditions proposed by the Settlement Agreement provide a means to further guard against future misconduct by Ms. Gossage, beyond the assurances provided through Dr. Foster's opinion;
(e) Ms. Gossage has suffered reputational harm, including the surrender of her licence to practice law, as a result of her misconduct;
(f) Ms. Gossage has been co-operative with the CRR Branch in its review of Ms. Gossage's ongoing suitability for registration;
(g) By agreeing to this Settlement Agreement, Ms. Gossage has saved the CRR Branch and the Director the time and resources that would have been required for an OTBH.
32. The CRR Branch and Ms. Gossage acknowledge that if the Director does not accept this joint recommendation:
(a) this joint recommendation and all discussions and negotiations between the CRR Branch and Ms. Gossage in relation to this matter shall be without prejudice to the parties; and
(b) Ms. Gossage will be entitled to an OTBH in accordance with section 31 of the Act in respect of any recommendation that may be made by the CRR Branch regarding her registration status.
33. The parties agree that this Settlement Agreement, and any Director's decision approving of it, will be published on the OSC's website and in the OSC Bulletin.
34.
Schedule "A"
Terms and Conditions
The registration of Caitlin Eloise Gossage (the "Registrant") under the Securities Act (Ontario) (the "Act") is subject to the following terms and conditions, which were imposed by the Director pursuant to section 28 of the Act:
Mentorship
1. For a period of at least twelve months from the date of the Director's decision these terms and conditions are imposed:
(a) Within 60 days of the Director's decision, the Registrant shall enter into a mentorship agreement for a minimum of one year with a more senior compliance professional (the Mentor) who shall be approved in writing by a Deputy Director or Manager in the CRR Branch (the OSC Manager).
(b) The Registrant shall meet with the Mentor at least once every three months and the Registrant will provide a summary of the items discussed with the Mentor to the OSC Manager following each meeting.
Continuing Education
2. The Registrant shall successfully complete the Osgoode Certificate in Regulatory Compliance and Legal Risk Management for Financial Institutions, and shall provide proof thereof on or before June 30, 2023.
These terms and condition of registration constitute Ontario securities law, and a failure by the Registrant to comply with these terms and conditions may result in further regulatory action against the Registrant, including a suspension of the Registrant's registration.
I have reviewed the attached Settlement Agreement, together with the jointly submitted materials in support of the Settlement Agreement and I approve the attached Settlement Agreement.
Dated this 29th day of March, 2023