Andrew A. Duffy
May 30, 2007
VANCOUVER -- The main attraction of the B.C. Securities Commission
hearing into former Berkshire Group investment adviser Ian Thow was a
Thow did not turn up at the BCSC offices in Vancouver, nor did any kind
of legal representative. That means what had been scheduled to be a
14-day hearing could be cut short.
Doug MacKay, the prosecutor acting on behalf of the BCSC, asked for and
was granted leave to proceed without Thow being represented.
The former vice-president of Berkshire Investment Group has been living
in Seattle since last summer, after fleeing Victoria and a high-profile
bankruptcy that left 73 former clients and unsecured creditors claiming
he owed them in excess of $32 million.
The former clients claim he cost them millions by having them invest in
a series of investment schemes, though it's becoming clear Thow used
that money to fuel his own lavish lifestyle.
While the man in question didn't turn up, some of his former clients did
and they provided hard-hitting testimony.
Under questioning from MacKay, Gloria and William Boudreau of Sidney
told how Thow convinced them to write a series of cheques totalling
$349,000 to invest in a mortgage scheme.
"We never saw a penny of it," said Gloria Boudreau, who said Thow cost
them their comfortable life and left them saddled with debt. She said
the couple trusted Thow because he came across as "very benevolent; he
seemed to be highly thought of in the community."
William Boudreau told the commission panel that Thow's actions have had
a tremendous impact on their lives, health and anxiety level.
"He stole my son's inheritance," he said, adding they went along with
Thow's advice because he was the senior vice- president of Berkshire and
had told them he wanted to help them after they suffered losses in the
"He got us at a very vulnerable point in our lives," he said, later
adding in an interview: "It will be so nice if we can put this behind us
and be able to live normally again."
And while she has heard the stories over and over again, Berkshire's
legal counsel Julie Clarke admitted it was hard to listen to the
"It's hard to watch them go through this, it bothers me that Mr. Thow
could do this to such nice people to really abuse their trust," she
When asked if Berkshire has tightened the rules around compliance in the
wake of Thow's actions, Clarke said there's only so much a company can
"No compliance regime is perfect, there's criminal laws out there and we
still have crime, we still have jails," she said.
"We do the best we can to make sure that safeguards are in place. This
is one adviser in more than 800 ... this was one broker who was clearly
off on his own."
Thow was certainly not being protected by Berkshire's legal counsel
yesterday, which caught one former client off guard.
"I'm a little surprised, I felt there was going to be a fight, I thought
Berkshire was going to fight this," said Kirk Wong, who claims Thow
bilked him for $250,000.
Wong said he has reviewed court cases between Berkshire and other
clients and seen the firm fight tooth and nail on what could be entered
into evidence. He was convinced they would fight on Thow's behalf.
But Clarke, who will attend the hearing this week as an observer, made
it clear Thow is on his own.
According to MacKay, Thow's former counsel advised the BCSC he had not
been retained as of last week.
But until MacKay took a quick look around during his opening remarks, he
admitted there was a chance either Thow himself or new legal counsel
might turn up.
"I never expected he'd be here, he wasn't going to show up after what
he's pulled on us," said Don Goodwin, patriarch of the Goodwin family,
which claims to be owed $1.4 million by Thow.
It was clear the pain of the betrayal was still biting away at him and
that his family has been on a rollercoaster of emotion for the last two
"There are highs and lows, you know, sometimes you get a bunch of
information and stuff and it picks you up and you think it's going to
make a difference, but then it falls down and you come down again," he
"But I am happy this is finally started, though it's clearly going to be
a long process."
The morning session was largely procedural, though in his opening
remarks, MacKay painted a picture of Thow as a man who used his
friendship and the trust he'd built up with clients to obtain funds and
misuse them to fuel his own lifestyle.
Mackay said that during their investigation, BCSC investigators were
able to confirm the $30-plus million figure Thow has been accused of
bilking from his clients is well within reason.
However, he warned because of the cost and the length of time it would
have taken to track every dollar lost, the BCSC traced only $5.5 million
-- all traced to Thow's personal use.
"And that's more than [enough] to merit the maximum penalty," he said.
The BCSC is seeking an administrative penalty of $250,000 -- the maximum
in 2005 when the investigation started -- and a lifetime ban from
selling securities in B.C.
A revised schedule for the hearing, which it appears will not have to
accommodate objections and cross-examinations from Thow's camp, has not
Today, the prosecutor will question four more witnesses.
In total, MacKay planned on putting 18 former clients on the witness
stand, a BCSC investigator, a forensic accountant and testimony to be
read into the record from transcripts of other interviews the
investigation team conducted.