Another lawsuit is launched against an ex-advisor who was convicted of bilking dozens of Canadian investors out of millions of dollars last November.
A convicted East Coast fraudster – who bilked dozens of clients out of an estimated $14 million – is back in the limelight facing another lawsuit.
Former financial advisor, John Alexander Allen – who once represented Global Maxfin Investments Inc. of Toronto and Keybase Financial Group Inc. of Markham, Ont. – is accused of negligence and breach of contract for alleged investment losses of a Trenton, Ont. woman, reported the Chronicle Herald on Wednesday.
According to court transcripts, the plaintiff Grace Weatherbie says she met Allen in 2005 when she was 47 years old and earning a $20,000 salary working part-time. Weatherbie – who claims she had minimal investment experience and few liquid assets – alleges that Allen recommended she pursue an aggressive leveraged investment strategy, which accrued about $375,000 in investment loans by the end of 2007.
Mutual funds purchased as part of the strategy enacted under both companies experienced significant value depletion and monthly distribution, contributing to Weatherbie's inability to meet required debt payments, she alleges.
Weatherbie is seeking special, punitive and general damages; as well as costs for an unknown amount to be determined at trial. Her action was filed in a Nova Scotia Supreme Court on Tuesday.
Last November, Allen was handed an 18-month conditional sentence by a Nova Scotia provincial court after pleading guilty to four counts of fraud, while working for Keybase Financial in Truro, N.S. The first nine months of his sentence must be served under house arrest, while the latter nine months under a curfew of 11p.m. to 6 a.m. The sentence includes 300 hours of community service and 18-months’ probation.
Allen was also fined more than $1 million by the Nova Scotia Securities Commission – the highest fine ever imposed for forging documents and misleading clients, according to the Chronicle.
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