OSC seeks to ban $10m Ponzi scheme ex-advisor

OSC seeks to ban $10m Ponzi scheme ex-advisor

OSC seeks to ban $10m Ponzi scheme ex-advisor

The Ontario Securities Commission wants to permanently ban a former Kitchener-based advisor and financial planner guilty of defrauding investors in a $10 million Ponzi scheme.

The commission yesterday issued a notice of hearing against Daniel Reeve who in June was sentenced to 14 years in prison after being convicted of one count each of fraud and theft. The OSC is seeking an inter-jurisdictional enforcement order that would impose a permanent registration ban.

During a trial that lasted almost two years, it was revealed that Reeve defrauded at least 41 victims, recommending various investments he characterized as low or no risk.

The OSC order stated: “Investors were encouraged to cash out their RRSPs or re-mortgage their homes to invest in one of Reeve’s three companies: Reeve Hotel and Resorts Incorporated, Celebrity Management International Incorporated, or Millionaire Mortgage Incorporated.”

Investments mainly took the form of either a corporate bond or a private equity agreement and some investors were told their investments would fund renovations to improve property Reeve owned or would be used for the expansion of his business. They were also promised interest rates between 12-20%, with varying terms of maturation.

The order added: “In reality, investor funds were almost immediately diverted by Reeve to one of the following purposes, unbeknownst to the investors: shareholder loans to Reeve and his ex-wife for, among other things, satisfying Reeve’s spousal support and equalization obligations; payment of expenses incurred by Reeve’s failing companies; and repayments to other investors in a Ponzi-like distribution.”

Prior to the period the crimes took place, Reeve had established a financial investment business, DPR Financial, and written several investment books, making media appearances regarding his approach to investing.

Reeve has 21 days to request an in-person hearing. Failing that, he has 28 day to respond to the allegations in writing.

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