Former Alberta fund salesman guilty of fraud

The provincial regulator says he also pled guilty to making misrepresentations to investors and to breaching a settlement agreement with the commission.

“When making these pleas, McDonald admitted that he had taken funds from three investors on the basis he would use the money to purchase securities in real estate investments connected to Edgeworth Properties Inc. Instead, he put the investors’ money into an account he controlled and used the funds for personal purposes,” the ASC says.

It reports that he also admitted to making misrepresentations when he told investors that he was authorized to sell securities and that the securities were protected by deposit insurance. And, he admitted to violating undertakings he made to the ASC in September 2010 as part of a settlement with the regulator.

A sentencing hearing has been scheduled for October 31. In the meantime, provincial court judge Van de Veen ordered a pre-sentence report and a “psychological/psychiatric” assessment of McDonald, the ASC says.

The ASC brought these charges against McDonald back in 2012.

In 2010, McDonald paid $20,000 and agreed to a 15-year trading and registration ban to settle allegations of perpetrating a fraud and making false statements to investors. (See Investment Executive, ASC concludes $20,000 settlement with Alberta fraudster, September 29, 2010.)

In that settlement, McDonald admitted that he raised $439,000 by telling seven Alberta investors that he would purchase GICs on their behalf. instead, it said that he used $260,000 of the investors’ funds to buy securities in another company in his own name and that of his business partner, and he deposited the balance of the investors’ money into a numbered company owned and controlled by him. In addition to settling with the ASC, McDonald voluntarily repaid the investors in that case.