He was her trusted advisor. Then he asked her to lend him money.
An Ontario court ordered an accountant and his firm to pay more than $211,000 after finding he breached his duty to a longtime client.
The Ontario Superior Court of Justice released its decision granting default judgment against accountant John Rosenthal and his firm, RZN, LLP, after they failed to respond to a lawsuit alleging breach of contract, fraudulent misrepresentation and breach of fiduciary duty.
According to the court's reasons, the plaintiff had been a client of Rosenthal since 2019, relying on him as his personal and corporate accountant and financial advisor. Rosenthal, a chartered professional accountant and a member of CPA Ontario, was a partner at RZN, a Toronto-based accounting firm.
In November 2023, Rosenthal solicited a $100,000 loan from his client, structured in the pleadings as a private mortgage transaction with a 15-month term, 11 percent annual interest compounded monthly, and a guarantee from RZN. Three months later, he solicited a second loan of $75,000 on similar terms. The client advanced both principal amounts to RZN, in trust, as the agreements required.
Both loans went into default after only partial repayment - the first in June 2024, the second in July 2024. Because Rosenthal and RZN never filed a defense and were noted in default, the court's findings rest on the facts deemed admitted through the unanswered claim, together with an affidavit the plaintiff swore in November 2025.
The court found the defendants breached their contracts with the plaintiff and separately breached the fiduciary and trust duties Rosenthal owed him as his longstanding advisor. Awarding $75,000 in punitive damages, well below the $150,000 sought, the judge wrote that Rosenthal "took advantage of a longstanding client relationship in a dishonest and disreputable manner."
Rosenthal and RZN were ordered, jointly and severally, to pay $65,558.24 on the first loan as of December 21, 2025, and $70,454.05 on the second as of December 13, 2025, with 11 percent interest continuing to compound monthly on each. They must also pay $7,237.30 in partial-indemnity costs, and the overall judgment bears post-judgment interest at 3.7 percent.
A second partner at RZN was named in the original claim but is not part of the judgment. The plaintiff did not pursue default judgment against him after learning in September 2025 that he had filed an assignment in bankruptcy, while reserving the right to pursue him later.
For wealth advisors, accountants and compliance teams, the case is a pointed reminder of the risk in mixing professional advisory relationships with personal investment solicitations. A client's trust in a longstanding advisor can become the vehicle for exactly the kind of conduct the court described here.
