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B.C. financial regulator trying to collect on $36.7 million in penalties

The B.C. Securities Commission is banking on changes in 2023 that give it the power to collect penalties by seizing retirement savings.

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The province’s financial regulator is again trying to collect on one of its largest penalties, by going after the fraudster’s retirement savings.

The latest effort comes after a failed attempt in 2021.

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Vancouver resident Earle Douglas Pasquill owes $36.7 million in penalties issued by a B.C. Securities Commission tribunal in 2015, but has not paid a cent.

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The tribunal, a quasi-judicial body that holds hearings and makes rulings on violations of the B.C. Securities Act, issued the penalties to Pasquill and associate Michael Patrick Lathigee after it found they raised tens of millions of dollars from nearly 700 investors without telling them the real estate development projects pitched were in serious financial difficulty. The panel also found millions raised to invest in U.S. foreclosures had been redirected to prop up the real estate developments with unsecured loans that went bust.

Pasquill and Lathigee were each issued a $15 million fine and ordered to pay back the $21.7 million lost by investors.

“Despite repeated demands for payment on Earle Pasquill, the orders remain unpaid,” says the securities commission’s most recent lawsuit filed in B.C. Supreme Court on Feb. 22.

Pasquill has not responded in court to this action but has fought earlier attempts to collect penalties, including through properties owned by his wife Vicki Pasquill.

The securities commission had made an initial attempt to go after about $700,000 in retirement savings, but in 2021 the Appeal Court of B.C. ruled against the regulator.

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The province’s top court revoked an April 2020 preservation order imposed to prevent Pasquill from withdrawing or transferring proceeds from two life-income-fund accounts. They are a type of registered retirement fund, in this case from Pasquill’s years as an employee at Eaton’s. The savings were just under $562,000 on Aug. 31, 2023, according to this most recent court filing.

Changes the province made in March 2020 to the Securities Act and the Court Order Enforcement Act were meant to allow the securities commission to seize registered retirement plans from fraudsters who have not paid their penalties.

But the Appeal Court said the changes had not gone far enough because a specific exemption was needed in the province’s pension act for securities penalties.

The B.C. government made those changes in 2023, to “expressly permit” the payment, return or withdrawal of a pension benefit by a forfeiture order under the Securities Act.

“As a result of the amendments … payments, returns or withdrawals payable to Earle Pasquill from the LIF accounts are eligible assets against which the commission may enforce its orders,” the B.C. Securities Commission said in its new court petition.

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These type of provisions are the first of their kind in Canada.

The B.C. government has been introducing changes to improve the securities commission’s penalty collection abilities and strengthen market regulations following a 2017 Postmedia News investigation that found more than half-a-billion dollars in penalties had gone uncollected by the B.C. Securities Commission in the previous decade, and that criminal prosecutions by police were rare.

In the continuing lengthy legal battle, the securities commission has also filed another petition to collect on the penalties through properties held by Pasquill’s wife.

A B.C. Supreme Court decision in December 2023 gave the securities commission the go ahead to test new powers granted in 2020 that provide more latitude in collecting ill-gotten gains through family members and third parties.

Under B.C.’s new laws, the securities commission can now go after family members of financial fraudsters, if they receive properties and other assets for less than market value, including transfers that not only take place during and after illegal activity, but before the illegal activity.

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The securities commission reached a partial settlement with Lathigee, who now lives in the U.S., last year.

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