The Nevada Supreme Court rejected an appeal of a lower court ruling, upholding an order from the British Columbia Securities Commission (BCSC), which seeks to collect $21.7 million from a fraudsman who has since moved from Vancouver to Las Vegas.
Back in 2019, a Nevada court ruled that the BCSC’s disgorgement order against Michael Lathigee was enforceable in the U.S. — the first time that monetary sanctions ordered by a Canadian regulator was upheld by a U.S. court.
Lathigee appealed that ruling, arguing that the disgorgement order amounts to a penalty that should not be enforced outside of Canada.
However, the high court rejected the appeal in a unanimous decision.
“The award does not represent a fine or penalty that, once collected, the BCSC can keep without obligation to the victims of the fraud,” it said in its decision.
The court also recognized the principle of comity — which holds that courts should generally recognize each other’s valid rulings.
“The policy of promoting cooperation among nations has special strength as between Canada and the United States,” the court said, noting that the countries share a long border, that their respective securities regulators routinely cooperate, and that Canadian courts often uphold judgements issued by the U.S. Securities and Exchange Commission (SEC).
The BCSC said that the decision gives it the right to pursue Lathigee’s assets in the U.S.
“Any money we collect from Michael Lathigee will be returned to his many victims, so this is a victory for them,” said Peter Brady, executive director of the BCSC, in a statement.
“It’s also a warning to others that they can’t avoid the consequences of market wrongdoing simply by moving to the U.S.,” he added.
In 2014, a BCSC hearing panel ordered $21.7 million in disgorgement against Lathigee, after finding that he fraudulently raised millions from investors.
In addition to the disgorgement order, the panel also imposed a $15 million penalty and permanently banned him from the markets in B.C.