One false promise to a crypto client cost this advisor dearly
An Ontario court found a financial advisor personally liable for a client's lost cryptocurrency investment on March 26, 2026.
In Helal v. 8340501 Canada Corp (2026 ONSC 1741), decided March 26, 2026, the Ontario Superior Court of Justice granted summary judgment in favour of plaintiff Bushra Helal against both 8340501 Canada Corp. ("834") and its sole shareholder, director, and officer, Michael Santonato, awarding her $152,086.41 on a joint and several basis.
Helal and Santonato met through a personal development leadership course in late 2017. At the time, Santonato was a senior financial advisor at Experior Financial Group Inc., where he later served as Executive Director from April 2018 to November 2023. Helal was a realtor with her own numbered company through which she held a portfolio of real property investments.
Over the years leading up to the failed investment, Helal invested in a series of opportunities Santonato introduced to her, including a film project loan, a real estate co-lending arrangement, and multiple loan agreements with 834 involving real estate. Each of those earlier investments returned both principal and interest.
In early 2021, Santonato approached Helal about investing in cryptocurrency. She expressed reservations, noting that cryptocurrency, including Bitcoin, were volatile assets and risky investment opportunities. On January 19, 2021, Santonato emailed her promising that stop losses, a risk management tool that automatically closes an investment position at a specific price to limit potential investment losses, would be used to protect capital or principal funds for crypto investments, writing "I guarantee it." He also promised to diversify the investment funds by investing in a few stocks to ensure an extra layer of protection and further reduce the risk of loss.
On July 16, 2022, Helal and 834 entered into a written loan agreement for $171,859 CAD over a six-month period at 12 percent interest, payable in monthly instalments of $1,718, with an option to extend 50 percent of the principal at 16 percent interest payable at $2,291 per month. Santonato signed the agreement as 834's CEO. She advanced the funds to 834. The investment failed. Santonato later conceded under cross-examination that stop losses could not be set due to the nature of the crypto platforms for the chosen crypto investments. He denied using her funds for personal benefit or enrichment, linking the failed investment to the volatility and sudden decline of cryptocurrency.
The court found that Santonato recklessly made a false representation when he guaranteed the use of stop losses without verifying whether they could even be applied to the chosen platforms. Even after learning they could not be used, he did not disclose this to Helal. The court found his silence also constituted a fraudulent misrepresentation.
Santonato argued that Helal, as a licensed realtor with a holding company, knew or ought to have known the distinction between 834 and himself personally, particularly as she had previously invested funds by making loans to other companies. The court was not persuaded.
To hold Santonato personally liable, the court applied a two-part test: that 834 was completely dominated and controlled by him, which was undisputed, and that he had engaged in fraudulent or improper conduct. The court found both conditions were met and pierced the corporate veil.
Helal had sought to recover the principal amount of the funds she invested plus the monthly interest payments owing under the terms of the Loan Agreement. The court awarded her $152,086.41, representing her original $171,859 investment less the $19,772.59 she had already received in partial repayments. However, because the Loan Agreement was found to be tainted by fraud and set aside, Helal was not entitled to contractual interest under its terms. She was awarded pre- and post-judgment interest under the Courts of Justice Act.
