Andrew A. Duffy
Friday, June 15, 2007
VANCOUVER -- The B.C. Securities Commission hearing into disgraced
Berkshire investment adviser Ian Thow wrapped up yesterday with the
commission panel hearing of a grounded pilot, and a retired couple
reduced to watching every penny they have.
It was yet more in what has been a long string of emotional testimony
from some of Thow's former clients, left behind when he fled the country
in the summer of 2005 after filing for bankruptcy.
Those clients and creditors say Thow owes them in excess of $30 million.
They claim he cost them millions by having them invest in a series of
schemes that included buying shares in the National Commercial Bank of
Jamaica, an initial public offering for Berkshire and providing
short-term loans to developers.
But as Daryl Goodwin from Delta pointed out yesterday when he took the
stand, those investments were never made.
The Goodwin family collectively claims Thow took them for $1.4 million.
The Air Canada Jazz pilot, who admits he has not been able to fly since
last July because he is suffering from anxiety and depression and has
trouble sleeping as a result of Thow's actions, said the investment he
made in the NCB Jamaica simply did not exist.
"I've since found out I didn't own any of it," he said, noting the
experience has destroyed his family. "My father's health has
deteriorated, it's destroyed my brother's life.
"And personally it's destroyed me in terms of being able to trust
He's not the only one. On more than one occasion during the three weeks
of the hearing, former clients scanned the room each day trying to
determine who was there and what their purpose was.
"We just can't trust anyone anymore," said Goodwin, who said his trust
has been further undermined by allegations some of Thow's former clients
have been bankrolling him, now that he lives in Seattle.
But like everyone else who has testified at the hearing, Goodwin admits
he trusted Thow at one point and invested $1.6 million in what he
thought were bank shares.
Goodwin did manage to get back all but $633,000, as Thow would
sporadically write him cheques claiming the money represented interest
he was making from his investment.
But as forensic accountant James Blatchford showed the commission panel
last week in a series of schematic charts, some of the money Goodwin got
from Thow came from some of his other clients.
For Victoria residents Douglas and Olga McColl, Thow's actions have cost
them what was to have been a carefree retirement.
"He has literally stripped me, my account, completely," Olga told the
commission panel. "I've had to go to my daughter to help me
In a later interview, Olga McColl said they have had to learn to pick
and choose and live with what they have.
"I've always been so independent," she said, with tears welling in her
eyes. "You scrimp and save and put the kids through school and get to a
position when things are better, and then you have nothing."
Together, the McColls invested $398,000 with Thow to be used in
short-term loans for Vancouver developers. They have nothing to show for
their faith in him.
"It has certainly curtailed things I might have done or wanted to do in
my retirement, in my golden years," said Douglas.
The panel also heard how Thow recommended that neither of the McColls
tell the other about what they were doing with their investments -- the
truth came to light only when Thow's story hit the newspapers.
The end of the hearing did not seem to bring much relief for Thow's
victims, as they choose to be called.
For many of them it is just another step along the way to getting some
kind of justice, and a hefty fine and trading bans for Thow would never
give them any kind of satisfaction.
"This is one arm of the system and hopefully it is a positive outcome,"
said Goodwin, who hopes they will also get a positive result from the
Mutual Fund Dealer's Association investigation into Berkshire. "There's
no satisfaction from this, but it is a step along the way."
Olga McColl said the only satisfaction she expects would be seeing Thow
in a cold jail cell.
"We're hoping they will be able to nail him because of all this. We're
hoping he doesn't get off scot-free and isn't able to take advantage of
other people like us," she said. "I'd like to see him in a six-foot room
with bars, and I'm hoping this will help that."
The BCSC is seeking a $250,000 administrative penalty, the maximum fine
allowed when the infractions took place, and a lifetime ban from trading
As of May 18, 2006, the fine per contravention of the B.C. Securities
Act was raised to $1 million, meaning the BCSC would be seeking a
penalty of as much as $4 million, had Thow's activities taken place
But his former clients doubt that would have been any kind of deterrent.
"It wouldn't matter what they fined him. We know the restitution will
never happen, he will never pay it, he doesn't pay anything he doesn't
follow the law," said Goodwin.
With the hearing now wrapped -- it ended early because remaining
witnesses' schedules could not fit into the hearing timetable -- BCSC
counsel Doug MacKay will have until June 29 to present a written
argument to the commission panel to consider before it makes a ruling.