Fraudster makes small dent in massive sanctions bill

The British Columbia Securities Commission (BCSC) has recovered a small portion of the monetary sanctions imposed on former financial advisor Michael Lathigee.

The BCSC said it had reached a settlement with Lathigee that resulted in him paying US$350,000 of the $36.7 million in sanctions that have been ordered against him — including $21.7 million in disgorgement and a $15-million penalty — after a BCSC hearing panel found that he fraudulently raised millions from investors.

In 2020, the BCSC won a legal battle against Lathigee — a former Vancouver resident who has since moved to Las Vegas — in Nevada Supreme Court, which ruled that the regulator’s disgorgement order was enforceable in Nevada.

Until now, Lathigee hadn’t voluntarily paid any of the $36.7 million he owes to the BCSC.

“It took years of litigation to obtain this first significant sum from Michael Lathigee, and we’ll make sure it goes to his victims,” said Peter Brady, executive director of the BCSC, in a release.

Under the settlement, the BCSC agreed to stop pursuing collections against Lathigee for three years. It also released a lien on his Las Vegas house, and returned other property it had collected from him, including artwork with an estimated auction value of less than US$80,000.

During the three-year hiatus, if Lathigee’s yearly pre-tax income exceeds US$250,000, he agreed to pay 40% of the excess (after tax) to the BCSC.

He also granted the BCSC “a secured interest in any other tangible personal property he owns — or obtains in the future — that could be used to pay his remaining debt to the BCSC,” the regulator said.

“We will continue to seek any available assets of his, either under the terms of the agreement or after the three-year pause comes to an end,” Brady added.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.