Don't assume that you will have easy access to retirement savings if you commit securities offences in British Columbia.
That's one take-away from a recent decision by a three-member B.C. Securities Commission panel.
It dismissed an application from a convicted fraudster, Earle Douglas Pasquill, who had filed an application seeking to revoke a commission preservation order.
It concerned his two life-income accounts at a wealth-management firm.
Pasquill alleged that he personally benefited by only $400,000 through his actions with the Freedom Investment Club Group, even though he was involved in a $21.7-million fraud.
That didn't persuade the commission to vary the preservation order.
"In dismissing this suggestion, we note that the Applicant has not paid any part of even the $400,000 from which he says he personally benefitted," commissioners George C. Glover, Jr., Deborah Armour, and Marion Shaw ruled. "Further, through the fraudulent acts of the Applicant and others, members of the investing public lost $21.7 million."
In 2014, an earlier commission panel concluded that Pasquill, a business partner, and several of their companies had raised this sum from 698 investors. And the scamsters did this without divulging issues related to their FIC Group's financial condition.
In addition, the earlier panel found that Pasquill, his partner, and associated companies raised another $9.9 million from 331 investors for investments in foreclosure properties. However, the commission ruled that they had actually siphoned away most of the money to provide unsecured loans to FIC Group companies.
Back in 2015, the respondents, including Pasquill, were ordered to pay back the commission $21.7 million. In addition, they were assessed a $15-million administrative penalty.
Legal arguments in the recent application came down to whether the commission had authority to impose a preservation order on a convicted fraudster's retirement savings.
"The Applicant argued that because of the special status of registered plans containing assets derived from pensions, the legislature cannot have intended that such plans, including the LIF Accounts, would be subject to enforcement processes taken under the Act," the commissioners stated in their recent ruling. "We see no basis to make that distinction."
The commissioners also rejected the applicant's argument that the tribunal cannot legally make "collateral orders" to implement an earlier decision.
That's because the commissioners concluded that section 164.04(2)(c) of the Securities Act allows a preservation order to be issued in a case like this.
In the meantime, Pasquill's wife, retired teacher Vicki Pasquill, and her company, Vicker Holdings Ltd., filed a lawsuit in B.C. Supreme Court in 2018 against the commission.
According to a Vancouver Sun story at the time, she alleged abuse of process after the commission had filed legal action to get access to seven properties that she owns.
Vicki Pasquill and Vicker Holdings filed a second lawsuit against the commission in 2019. On July 27, 2020, the most recent chambers application was adjourned.