Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.
Issue link: http://digital.canadawide.com/i/505959
MortgageBroker mbabc.ca spring 2015 | 39 legalease On March 27, 2015 the British Columbia Securities Commission (BCSC) fined and ordered permanent bans against Michael Patrick Lathigee and Earle Douglas Pasquill for perpetrating amongst the largest frauds in the history of British Columbia. On July 8, 2014 the two men were found to have jointly directed and controlled a group of companies called the Freedom Investment Club (FIC Group). e BCSC found the two men, along with their companies, fraudulently raised $21.7 million in 2008 through the sale of securities to 698 investors. In perpetrating the fraud, no disclosure was made to the investors as to FIC Group's financial situation. e two men knew FIC Group had severe cash flow problems including an unfunded $8 million cost overrun on the company's biggest project. e two men, along with their foreclosure company (FIC Foreclosure Fund Ltd.), were found to have perpetrated a second fraud when they raised $9.9 million from 331 investors in FIC Foreclosure. e disclosed purpose of the funds was to invest in foreclosure properties; instead most of the funds were used to make unsecured loans to other FIC Group companies. Lathigee and Pasquill were each ordered to: • Pay a $15 million administrative penalty; • Resign any position held as an officer or a director of an issuer or registrant (however, Lathigee is permitted to be a director/officer of one issuer whose securities are solely owned by him and his immediate family members); • Be permanently banned from trading in securities, purchasing securities or exchange contracts, and from becoming or acting as a director or officer of any issuer or registrant. However, each man could trade on his own account through a registrant; • Be permanently prohibited from becoming or acting as a registrant or promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market. e panel also ordered the two men and their indicated respective company to pay the BCSC the monies obtained as a result of their misconduct: • $9.8 million relating to FIC Projects • $9.9 million relating to FIC Foreclosure • $2 million relating to WBIC Cease-trade and permanent prohibition orders were made against all of the corporations. Fraud Vulnerability On March 31, 2015 the BCSC announced the results of a survey into the fraud vulnerability of older British Columbians. e research surveyed 800 British Columbians aged 50 and over. Chair and Chief Executive Officer Brenda Leong said, "Our survey results show that what investors think, feel, and do matters when it comes to investment fraud vulnerability. is means thinking about investments the right way, feeling confident and financially secure, and taking steps to avoid risky situations." Some of the key findings of the survey, according to the BCSC, are that: ■ One in eight British Columbians over 50 are vulnerable to investment fraud. When presented with an investment opportunity that guaranteed 14% to 25% monthly and no risk, 10% said they would either look into it further and 3% said they simply didn't know, suggesting they are not sure enough to reject the offer. ■ Nearly two in five British Columbians over 50 (37%) are afraid Focus on Fraud Ray Basi Director of Policy & Education raybasi@mbabc.ca e B.C. Securities Commission bans two traders and releases the results of a survey into the fraud vulnerability of older British Columbians What investors think, feel, and do matters when it comes to fraud vulnerability.