Less than six months ago, a millionaire Toronto mortgage broker was on the verge of a deal that would confirm his reputation as one of Canada's most high-flying, successful promoters and dazzle the Canadian real estate industry.

Last autumn, the broker, Leonard Rosenberg, short, balding, and 43 years old, played a key role in what is believed to be the biggest property transaction in Canadian history, a staggeringly complex sale of almost 11,000 apartment and town house units reportedly to unknown Arab investors for $400 million.

At the same time, he bought control of one of the country's largest and most prestigious financial institutions, Crown Trust Co.

But now, after a series of cataclysmic events without precedent in Canada, Rosenberg's financial empire is crumbling around him.

He has been stripped of control of two companies with assets totaling more than $1 billion. His bankers have refused to do business with him. And last week, authorities sought to seize $6 million in assets of another of his firms, taking a Rolls Royce, a jet aircraft and art work by Auguste Rodin, Vincent Van Gogh and others.

In the course of the affair, the conservative-minded government of Ontario Province has intervened more extensively in business than ever before, and the country's staid trust industry has been sent reeling by waves of adverse publicity.

The repercussions of the $400 million deal, known as the Great Toronto Apartment Flip, are causing many experts to worry that the real estate and trust industries in Toronto, Canada's financial capital, may never be quite the same again.

That controversial sale capped a meteoric climb by Rosenberg to the highest reaches of the country's trusts companies, an old-line industry traditionally dominated by wealthy, establishment families.

Often called "near banks," these financial companies are empowered by law not only to carry out fiduciary activites such as administering estates and pension plans, but also to conduct many of the same activities as the country's 12 government-regulated banking chains.

The trusts, with assets of more than $150 billion, also can accept deposits and make mortgage, consumer and business loans.

The apartment-sales affair began last November, when Rosenberg, although still little-known, was in the midst of an aggresssive expansion of his financial operations.

After months of planning, Rosenberg agreed to buy almost 11,000 apartment units in Toronto being offered for sale by Cadillac Fairview for a reported $215 million. It was the first of a series of head-spinning transactions in which two sets of middlemen bought the properties and then hustled to sell them before actually paying for them.

With batteries of lawyers looking on, Rosenberg made $35 million by turning the units over for $250 million to William Player, an acquaintance known for his country-western look, a penchant for exotic places and a talent for property flips.

Player in turn sold the apartments for $400 million to a series of numbered companies. Ontario law makes it impossible to find out who owns these firms, but they are thought to be controlled by Saudi Arabian investors.

In a crucial part of the deal, Rosenberg, Player and another Ontario wheeler-dealer, Andrew Markle, advanced third mortgages totaling $120 million.

Revelation of the huge sale brought angry reactions from metropolitan Toronto's 2.9 million residents and embarrassed the Ontario government, which administers the province's landlord-tenant laws.

Tenants zealously defend current laws holding annual rent increases to prescribed limits, although they are controversial.

Despite the Rosenberg group's claim to the contrary, some experts calculated that the apartment owners would have been obliged to double the rentals on the buildings to cover their second and third mortgages.

In the past, officials had allowed such large rent hikes if needed to cover higher mortgage costs. But shortly after the controversial apartment sale, the Ontario government put through a law limiting the amount of new mortgage charges that could be passed on to tenants by new owners.

Shortly thereafter, with the uproar over the sale mounting, Ontario Premier William Davis' Progressive Conservative government appointed auditors to trace the deal's tangled paper trail through the books of Crown Trust, Player's Greymac Mortgage Corp. and Markle's Seaway Mortgage Corp.

Then in January, in a move that stunned Canada's financial community, the government, without explaining why, seized control of the three companies' combined assets of almost $2 billion.

To do so, Ontario used sweeping emergency legislation passed less than a month earlier.

The action, unprecedented in Canada, made headlines as far away as West Germany, one of a number of countries whose citizens have huge sums invested in Canadian real estate.

A former Ontario Cabinet minister commented bitterly, "I haven't heard of this happening in Ontario, and there's a hell of a lot other jurisdictions where I haven't heard of it happening. I think it happened in Cuba in 1959."

Amid fears of a run of depositors on the government-seized firms and rising demands to justify the takeovers, Ontario announced its finding that the trust companies involved in the apartment sale had violated provincial laws and jeopardized their own financial health--thus risking their depositors' funds.

The government said the companies had broken rules in the apartment sale prohibiting a trust firm from advancing mortgages exceeding 75 percent of the value of a property.

In early February, Ontario sold the most important of the seized companies, Crown Trust (Canada's 12th largest trust firm) to Central Trust of Halifax, Nova Scotia, reportedly for $2.4 million. Under the terms of this transaction, the new owner is acquiring Crown's assets with the intention of dissolving the company over a five-year period.

A senior official said the decision was reached in hopes of limiting losses by Crown's shareholders and depositors and of protecting employes' jobs. He said that the alternative was immediate liquidation.

No action has been taken concerning the other two companies involved, although similar sell-offs are expected.

The shocks from the affair continue to ripple outward. Trust company officials worry that public confidence may be undermined irreparably. Rosenberg and others have filed more than a dozen lawsuits, many of them against the Ontario government.

The government has been attacked on all sides, with some critics charging it with lax regulatory enforcement and others decrying the hasty takeover of the trust firms as a blatant infringement of the owners' rights.

As a result of the furor, the Canadian government has raised the limit of its protection for individual trust company depositors to almost $50,000 from $16,000. Further reforms of laws governing the trust and loan companies seem inevitable.

Rosenberg has angrily blamed what he calls the "trust companies establishment" and government policies for his troubles.

He says that the deal was "one of the most beautiful financial maneuvers anyone ever made. But I made one mistake: I forgot it was Canada."