The Laughlins approached Connor Financial in 2000 to seek financial advice after looking to manage and eliminate their debt. According to the judge, they held “conservative” retirement savings plans and believed advice received from the company would leave them debt-free in three years.
Well, that didn’t happen. They collapsed their savings plans and allowed Connor Financial to purchase mutual funds, which left them in a risky position.
“The Laughlins signed many documents, making many commitments. Ms. Laughlin found it to be overwhelming. Neither of the Laughlins knew what they were getting into,” the judge said.
When the loan was first taken out, the interest rate was 13 per cent. But in small print on the reverse side of the document, Connor could change the interest rate at any time with 30 days’ notice, the court heard.
There were no criteria required to do that, such as a change in the prime lending rate, Macintosh said. The Laughlins wanted to make their final payment in 2004 and sell what was left in the mutual fund to put towards debt. But their funds were locked in until 2008.
The B.C. Securities Commission sanctioned Connor for pocketing interest from clients’ trust accounts in the 1990s, Macintosh said. In 2005, the commission prohibited Connor and Connor Financial Corp. from lending money to mutual fund clients.