When client losses go unchecked

In a case that continues to see affected investors contacting WP to retell their individual stories of hardship one has to wonder how many clients must be hurt by the actions of a rogue advisor before regulators act in the best interests of those injured parties

In early December WP reported to advisors news that a B.C. man, Rodney James Wharram, had been permanently banned from the province’s capital markets and fined more than $1 million dollars for fraudulently taking monies meant for real estate development and using it for their personal expenses.

It’s a case that’s been on WP’s radar since July 2013 when we reported on sanctions made against another man, James William Duke, a former insurance agent in the province, who put a client into the real estate development investments mentioned previously.

The client is said to have lost many thousands on these investments which subsequently were found to be fraudulent. But they weren’t the only ones.

In the past year WPs been contacted by no less than half a dozen people either directly or indirectly affected by the actions of Wharram. WP’s tried to bring attention to this situation but given WP’s a publication for advisors and not consumers, it’s hard to make a dent in the regulatory backlog that exists at the BCSC and elsewhere.

While the BCSC looks to collect $517,500 from Wharram as a direct result of the financial misconduct against investors, and also looks to collect an additional $500,000 administrative penalty to deter others from carrying out the very same misdeeds, it’s unlikely that any of these funds will find their hands into the handful of clients who’ve contacted WP over the past year.

WP will continue to report on this case but it must leave honest advisors wondering how many clients must lose money before regulators will step in and do what needs to be done in order to make these losses whole.