Ramandeep,
Khan wanted to have a steady income stream from the stock portfolio as he anticipated living off the revenue, according to a lawsuit he has filed against Jones and several companies she worked for.Jones told him that the portfolio would be a mix of blue chip, dividend-paying stocks and high-performing bonds of established corporations and money market trading, says the lawsuit filed in B.C. Supreme Court.Khan, as an unsophisticated investor, found that many of the initial stocks purchased were unfamiliar to him, and he relied heavily upon Jones, who assured him that his monthly take would be $50,000, says the suitBut between May 2007 and April 2008, Jones engaged in a number of transactions without Khan’s consent, selling a number of blue chip equity-paying stocks and investing the funds in speculative ventures, says Khan.
Those investments had the effect of increasing the transaction fees and improving the commissions paid to Jones, and by April 2008, his investment of $3.5 million had dropped to $3.1 million.“The plaintiff had no experience reviewing financial statements and relied on the defendant Catherine Jones to provide him with periodic updates as to the value of his portfolio,” says the suit.“Throughout the course of her interaction with the plaintiffs the defendant Jones repeatedly overstated the value of the portfolio and told the plaintiff that his portfolio was worth a great deal more than what was contained in the financial statements.”Between April 2008 and October 2010, Jones allegedly engaged in a pattern of repeat buying and selling the same individual stock indiscriminately, often several times per day, having the effect of increasing the transaction fees and commission.
She also allegedly engaged Khan’s account with Dollars and Dreams Investments Ltd. in high-risk investment strategies, including buying shares on margin.Khan was arrested on April 28, 2009 after he was spotted by Transit Police having sex with a woman against the hood of a luxury BMW M5 sedan between the Nanaimo and 29th Avenue SkyTrain stations.At the time, police said that Khan, who is subject to a lifetime ban from possessing firearms, had a loaded revolver with him.He was charged with five firearms-related offences, including careless use of a firearm, and was remanded in custody.He remained in custody until April 19, 2010, when he was acquitted of all of the criminal charges, according to the writ.While he was in custody, Jones was unable to obtain obstructions from him, but continued the pattern of buying and selling shares, including day trading, short selling and purchasing shares on margin, says the writ.
Khan, who has a record dating back to 1998, when he was charged with committing assault with a weapon and discharging a firearm with intent to wound, claims that he lost $1.6 million between May 2007 and September 2010 as a direct result of Jones’s “reckless and/or unsound” investment strategies.Between October 2010 and August 2012, he says, he lost another $700,000. His lawsuit seeks to have the $2.3 million in lost funds returned to him.Three companies where Jones worked — Leede Financial Markets Inc., Union Securities Ltd. and Global Securities Corporation — are also named as defendants.A woman with the same name who worked for the same three companies as Jones has been the subject of disciplinary hearings in the past by the Investment Industry Regulatory Organization of Canada, the regulatory body that oversees Canadian stockbrokers.
In May 2014, the agency ordered a Catherine Deborah Jones to pay $48,000 for making unsuitable recommendations and engaging in unauthorized discretionary trading in a client’s account in 2009 and 2010, when Jones was working at Leede Financial Markets. Jones was also suspended for three months, and ordered to pay $15,000 in costs.In January 2012, the IIROC and Jones agreed to a settlement in a separate case after Jones admitted she had offered to guarantee an initial investment made by a client in 2007, contrary to rules. She also admitted to making discretionary orders without her client’s authorization. She was fined $22,500 and subjected to six months of close supervision
