BCSC panel finds that two B.C. residents committed $21.7 million fraud
Vancouver – A British Columbia Securities Commission panel has found that Michael Patrick Lathigee and Earle Douglas Pasquill committed fraud. Both Lathigee and Pasquill were residents of Vancouver during the relevant period.
Lathigee and Pasquill jointly directed and controlled a group of companies called the Freedom Investment Club (FIC Group). The FIC Group included FIC Real Estate Projects Ltd., FIC Foreclosure Fund Ltd., and WBIC Canada Ltd.
By early 2008, the FIC Group had taken on significant debt in relation to several Alberta real estate properties it had acquired and was attempting to develop. All of the loans included guarantees from other FIC companies. Also at this time, Lathigee and Pasquill were aware that FIC as a whole was, in their own words, “in a very bad situation” and “close to insolvency”, but chose to keep this information confidential, and instead focused on raising money in an effort to “save” FIC.
The panel found that between February 1, 2008 and November 15, 2008, Lathigee and Pasquill fraudulently raised $21.7 million through the sale of securities to 698 investors without telling the investors important facts about the financial condition of the corporate respondents. The panel found that Lathigee and Pasquill knew when they were distributing the securities that FIC Group had severe cash flow problems, including an unfunded $8 million cost overrun on the company’s biggest project.
The panel found that the Lathigee and Pasquill also committed fraud by using $8.5 million of $9.9 million raised from 331 investors in FIC Foreclosure to make loans to related companies instead of investing the funds in foreclosures of residential properties in the United States, the purpose for which the funds were raised.
In its decision, the panel stated that, “As a consequence of the respondents’ dishonesty, the pecuniary interests of the investors in the corporate respondents were clearly put at risk. The 698 investors invested, and have lost, $21.7 million. It would be difficult to find a more compelling example.”
The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.
You may view the findings decision on our website www.bcsc.bc.ca by typing Michael Patrick Lathigee, Earle Douglas Pasquill, FIC Real Estate Projects Ltd., FIC Foreclsoure Fund Ltd., WBIC Canada Ltd., or 2014 BCSECCOM 264 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators’ Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
About the British Columbia Securities Commission (www.bcsc.bc.ca)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
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Richard Gilhooley, Media Relations
604-899-6854 or 1-800-373-6393 (toll free)
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