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Here is a case that we could debate and discuss. It concerns a unlicensed person who took in a total of three million dollars from investors and deposited it all in a central bank account. In return she would issue statements as she was supposedly buying and selling stocks for these investors. At the same time she was writing cheques out of the same account to pay other people off who decided to withdraw some of their supposed profits. The whole thing lasted approximately three years until all assets were frozen by the OSC. All of this occurred approximately eight years ago. In the end the mastermind behind this scheme went to prison for three months. It was determined that, other then some silver and gold certificates, no securities were ever purchased. None of her inside people were ever convicted of any crime even though they knew what was going on at the time. There were a few unsuspecting investors who were encouraged to go out and invite other people to invest in the scheme as well but none of these people were ever convicted of any wrongdoing either. The trustee in bankruptcy was able to recuperate approximately one million dollars initially. The trustee also set out to threaten legal action against all of those who collected more money then they had originally invested. The problem is that the accounting was a nightmare and it is difficult to trace some of the funds so the trustee in bankruptcy is still not exactly sure who owes what after eight years. The question is that after all of this time do the investors who lost money have any claim (through the trustee in bankruptcy) to money paid out to investors who profited by taking more than their original investment out of the phone company.

Mark