Investors Scrutinizing the Regulators

Home Page

InvestorVoice.CA


Securities Regulation In CanadA


Fox Guarding the Hen House

   

BCSC ruling on Thow 'an exercise in futility'
B.C. Securities Commission says financial advisor preyed on elderly, disabled


Nathan VanderKlippe

Wednesday, October 10, 2007

VANCOUVER -- A sternly-worded securities commission ruling against disgraced British Columbia financial advisor Ian Thow is "an exercise in futility," according to an elderly woman impoverished by the man who stole millions to fund his jets, yachts and mansions.

"He's not giving back our money, is he? Even if they fine him, they're not going to get money from him. He's not even here in Canada," said Shirley Garwood, a 70-year-old Vancouver Island widow who, together with her 80-year-old sister, invested $465,000 in a short-term construction loan scheme that never existed.

It was a pattern that Mr. Thow, who was at the time a senior vice-president with Berkshire Investment Group Inc. in Victoria, repeated with dozens -- perhaps hundreds -- of people in B.C. and Alberta. All told, it is alleged he bilked them out of $32-million.

'HE'S NOT GIVING OUR MONEY BACK, BACK IS HE?' VICTIM SAYS

 

An undated photo of Ian Thow in a helicopter that he was trying out, but didn't buy.
Photograph by : Archive photo

Yesterday, a panel of the B.C. Securities Commission ruled on the cases of 26 people, who Mr. Thow together convinced to invest $8.7-million into the construction scheme and shares of National Commercial Bank Jamaica Ltd. Those investments never existed, and Mr. Thow instead blew $6-million of their dollars on an ostentatious lifestyle that included two lavish personal jets -- one complete with gold-plated seat belt buckles -- a 56-foot yacht, a massive house and extravagant food and clothing purchases.

His own declarations that he was worth a half-billion dollars, his habit of showing up to meetings in his own helicopter and his offers to potential clients of silver-sky trips in his private jet convinced them that he was a man who knew how to spin cash -- and, often, money borrowed against mortgage-free homes -- into gold.

Through high-profile charity work for Crime Stoppers, hospital and police foundations he also suckered in much of Vancouver Island -- and celebrities like Nickelback's Chad Kroeger -- into thinking he was, in Ms. Garwood's description, "a paragon of virtue."

In fact, he was nothing of the sort. Ms. Garwood now calls him a "psychopath." The B.C. Securities Commission called him one of the worst it has ever seen.

"This case represents one of the most callous and audacious frauds this province has seen. Mr. Thow preyed on his clients by offering them non-existent securities," the commission's panel wrote. "He took their money and betrayed their trust. He has left a trail of financial devastation and heartbreak."

In its ruling, the panel declared Mr. Thow a fraudster who failed to deal fairly, honestly and in good faith with his clients, traded in securities without being registered to do so and made untrue statements of material facts about the securities he offered.

Next month, the commission will hear submissions on punitive measures, but, given that Mr. Thow fled the province in the middle of the night years ago and now lives in the Seattle area, he is now beyond the reach of B.C. regulators.

"I have to be sympathetic to the victim's comments. I understand our action may not do much for her," said Lang Evans, the commission's director of enforcement. "What it does do is obviously condemn his activities. It's a permanent blot on his record and it will be on our Web site forever."

But Ms. Garland -- who received some of her money back through mediation with Berkshire but still has hundreds of thousands outstanding on a mortgage Mr. Thow convinced her to take out -- said justice demands more.

"I don't think I'll ever get my money back, but I sure would like to see that man in jail," she said. "He destroyed our lives. We can't even travel. We can't do anything. And he's sitting there living this rich lifestyle in Seattle. I think this man should be made to pay."

WHAT'S NEXT:
 
B.C. Securities Commission takes submissions in November on penalties; it will rule on Dec. 24.
Maximum penalty is $250,000 fine, plus life-time ban from dealing in securities
Chances of B.C. Securities Commission recouping that are slim. Mr. Thow has left Canada, and though some of his assets were seized, they were largely bought with borrowed money and the residual value is only a sliver of the maximum fine.
RCMP say it is investigating Mr. Thow, but the Crown has made no decision on which charges to press. An extradition order will likely be necessary to bring Mr. Thow back to Canada.

nvanderklippe@nationalpost.com

see: 

Ian Thow takes flight