British Columbia Securities Commission

British Columbia Securities Commission

July 15, 2005 09:30 ET

British Columbia Securities Commission: White Rock Mutual Fund Salesperson Committed Fraud in Stealing Clients' Money

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 15, 2005) - The British Columbia Securities Commission has ruled that a former White Rock, B.C.-based mutual fund salesperson defrauded his clients of about $1.6-million during a six-year period.

A commission panel found that Paul Robert Maudsley and Shaylor Management Ltd. violated the Securities Act in committing fraud when Maudsley convinced 23 clients to redeem about $1.6-million in mutual fund holdings to invest in other securities. Maudsley did not invest any of the money, instead taking the clients' money for his own use to fund his personal and lifestyle expenses, including, a self-admitted substance abuse problem described by a witness as "his cocaine and gambling habit and alcohol addiction."

The panel also found that Maudsley failed to deal fairly, honestly and in good faith with his clients - nearly half were over 70 years old and three individuals suffered from physical or mental disability.

"He simply took their money, or caused Shaylor to do so - about as stark an instance of deceit as there can be," said the panel.

"The evidence provides clear and convincing proof that Maudsley had subjective knowledge of the deceit, and that it would result in the deprivation of others."

Maudsley committed his violations when he was a mutual fund salesperson at Investors Group Inc.'s South Surrey Regional Office in White Rock between 1996 and 2003. He was fired from the firm on Mar. 3, 2003.

In January 2003, when a compliance officer at another mutual fund dealer alerted BCSC staff with concerns about an "off-book" transaction involving Maudsley, the BCSC contacted Investors Group which launched an internal investigation.

Investors Group has compensated the victims, paying over $2.3-million to those hurt by Maudsley.

The panel will review submissions from the parties before it issues sanctions.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website by typing in the search box, Paul Robert Maudsley or 2005 BCSECCOM 463.

Contact Information

  • British Columbia Securities Commission
    Andrew Poon
    Media Relations
    (604) 899-6880 or (B.C. & Alberta) 1-800-373-6393