An Ontario Securities Commission (OSC) panel has permanently banned a financial planner who is already serving a 14-year jail sentence for an “egregious” fraud that saw investors lose more than $10 million in an apparent Ponzi scheme, the OSC announced Tuesday.
The panel banned Daniel Reeve, a planner in the Kitchener, Ont. area, from trading and registration on the strength of his conviction for fraud last year. On Oct. 13, 2017, Reeve was sentenced to 14 years in jail and ordered to pay $10.9 million in restitution to his victims after being convicted for defrauding at least 41 investors of between $10 million and $12 million.
Reeve’s conviction stemmed from a scheme that involved soliciting investors to make various high-return, low-risk investments that were then diverted to purposes such as making repayments to other investors (often called a Ponzi scheme), to finance his failing businesses and to make spousal support payments.
The OSC panel found that Reeve’s conviction involved securities, as the transactions in investment contracts met the legal test to qualify as securities. It ruled that a permanent ban was necessary.
“I respectfully agree with Justice Skarica’s characterization of this matter as “an overwhelming case of fraud”,” Timothy Mosely, panel chairman, wrote in the panel’s reasons and decision, adding that the fraud involved a large number of victims, a large amount of money and a breach of trust which, “has the potential to affect investor confidence in investment firms and, ultimately, the Canadian financial system.”
“This case is among the most serious to have come before the commission. Only a permanent ban on Mr. Reeve participating in the capital markets would adequately protect investors and those markets,” Mosely wrote.
Reeve did not participate in the OSC’s proceedings.