The Ontario Securities Commission is seeking a permanent ban against a former mutual fund advisor and financial planner who was found guilty of defrauding investors in a $10 million Ponzi scheme, the commission announced Wednesday.
The OSC has issued a notice of hearing against Daniel Reeve seeking an inter-jurisdictional enforcement order that would impose a permanent registration ban against the former Kitchener, Ont.-based planner who was sentenced in June to 14 years in prison after being convicted of one count each of fraud and theft.
“Following a trial that spanned almost two years, Reeve was found guilty of defrauding at least 41 victims of approximately $10 million through several Ponzi schemes,” the OSC states in its allegations.
In addition to the jail sentence, the court ordered Reeve to pay $10.9 million in restitution.
The scheme involved encouraging investors to cash out their RRSPs, or remortgage their homes, to invest in one of Reeve’s companies: Reeve Hotel and Resorts Inc.; Celebrity Management International Inc. or Millionaire Mortgage Inc.
“Investments predominantly took the forms of either a corporate bond or a private equity agreement. Some investors were told their investments would fund renovations to improve property Reeve owned, or would be used for the expansion of his business. Investors were also promised interest rates between 12 and 20% with varying terms of maturation,” the OSC states.
Instead, investor funds were “almost immediately diverted” to Reeve, his ex-wife, to prop up his failing companies and to repay other investors, the OSC states.
The court found that, “Reeve put almost $12 million of the 41 victims’ investments at risk, resulting in a loss of approximately $10 million, and that restitution is unlikely,” the commission adds.
According to the notice, Reeve has 21 days to request an in-person hearing. Failing that, he has 28 day to respond to the allegations in writing.