Alleged Montreal Ponzi scheme spurs calls for single regulator

A case of suspected fraud in Montreal involving Earl Jones Corporationhas renewed calls for a single professional order to govern financial advisers.

Jocelyne Houle-LeSarge, executive director of L'Institut qubcois de planification financire (IQPF), said the three separate bodies that govern financial advisers in Quebec are not doing an adequate job.

Houle-LeSarge was reacting to news last week that Jones, an unlicensed financial adviser based in Pointe-Claire, is suspected of bilking his clients out of about $50 million in a Ponzi scheme a type of pyramid sales scam in which money from new investors is used to pay off the earlier ones.

Jones, who is nowhere to be found,has not been charged and the allegations against him have not been proven in court.

Besides the IQPF, the otherbodies overseeing advisers in the province are:

• Autorit des marchs financiers.
• Chambre de la scurit financire.

Houle-LeSarge said a single governing body would provide investors with more information and better protection.

"This professional order would put out information to the public about what is a financial planner, how he is trained and what should be expected from a financial planner. People would be more aware of what they should expect and of their rights," said Houle-LeSarge.

The IQPF currently trains all financial planners in Quebec. Houle-LeSarge said financial planners should not be permitted to sell financial products as it places them in a conflict of interest.

She said the province's Office of Professions has rejected the idea of creating a single professional order.

"The end conclusion was that the status quo works. But, we have so many examples that show that the status quo doesn't work, and Jones is just another example," said Houle-LeSarge.

The province's justice minister declined to comment.