Berkshire distances itself from accused rogue advisor

(July 8, 2005) Berkshire Investments says it had no involvement in alleged wrongdoing by an advisor that worked for the firm in Victoria, B.C. Ian Thow was the subject of a scathing profile in The Vancouver Sun earlier this week.

The article described Thow’s extravagant lifestyle, which reportedly included ownership of a $1.5 million yacht, a $3 million jet and a $4.6 million dollar waterfront home. It also alleges that four Berkshire clients have filed lawsuits against Thow, claiming he induced them to buy shares of the National Commercial Bank of Jamaica. The clients claim to have lost $3 million.

Thow left Berkshire at the end of May, telling clients he was pursuing other business interests.

In a letter published in Friday’s National Post, Berkshire says the court proceedings relate to business transactions allegedly entered into by Thow for which he was not licensed.

The firm states that Thow was licensed to sell only mutual funds and insurance products, not securities, and that he had no direct relationship with company owner Michael Lee-Chin or any other senior Berkshire management.

“Berkshire was not involved in and was not aware of the alleged transactions,” the letter states. “We are concerned about how these allegations may negative impact on the reputation of Berkshire and its advisors.”

Thow was not licensed to sell shares of the National Commercial Bank of Jamaica and was not authorized by Lee Chin to conduct such transactions, Berkshire claims.

Berkshire says when it learned of the allegations against Thow, it immediately contacted securities regulators and police and if fully cooperating in the investigation.

Berkshire is owned by Burlington, Ont.-based mutual fund company AIC, and the entire operation is headed by Lee-Chin. AIC acquired a majority stake in the National Commercial Bank of Jamaica in 2002.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com