Lawyer suspended
CMT’s John Findlay under investigation for alleged misappropriation of funds in Ontario
“I have used the hold back funds and I was not able to replenish the funds. My partner Margaret McCarthy had no knowledge of this. Nor did the final administrator of the fund, whom I have just informed.” John W. Findlay
The lawyer representing companies suing the P.E.I. government over the province’s failed Internet gambling scheme has been suspended and is under investigation for alleged misappropriation of funds in Ontario.
John W. Findlay, the lawyer for Capital Markets Technologies Inc. (CMT) and 7645686 Canada Inc., has been suspended from practising law by the Law Society of Upper Canada. He is now under investigation for $1.5 million missing from a class action settlement fund for residents and businesses affected by a protest in 2006 in Caledonia, Ont.
Findlay’s law firm, Findlay McCarthy PC, informed claimants in a notice on May 29 the money, which he was holding in trust, has been spent and he was “unable to replenish these funds.”
He offered no reason about how or why the money was gone, but did say he had filed a self-reporting complaint to the Law Society of Upper Canada. Findlay has been the legal counsel for CMT in the ‘egaming lawsuit’ that has been winding its way through the Supreme Court of P.E.I. for more than a year.
CMT president Paul Maines says Findlay was terminated immediately after he learned of Findlay’s legal troubles in Ontario, but stressed this has no bearing on his own legal case. “We’re shocked,” Maines said Monday.
“It’s unfortunate for him (Findlay), but obviously we’re not part of that matter.” The missing money in Ontario was the last remaining amount in a $20 million settlement paid out by the Ontario government following a class action lawsuit filed by Findlay’s law firm.
It stemmed from an occupation in 2006 of a controversial housing project by members of Six Nations, who said it was their land. The occupation lasted months and resulted in some injuries and property damage. The province agreed to the settlement in 2011 for over 700 residents, business owners and contractors. Most of the money had already been distributed, but the courts ordered $1.5 million to be held back pending any subsequent claims. It’s this $1.5 million that Findlay now says is gone.
His May 29 email to the law society reporting the missing money was included in court documents filed as part of a law society tribunal hearing held last month. “I have used the hold back funds and I was not able to replenish the funds,” Findlay wrote.
“My partner Margaret McCarthy had no knowledge of this. Nor did the final administrator of the fund, whom I have just informed.” According to an affidavit filed by a forensic accountant appointed by the Law Society of Upper Canada, Findlay tried to resign as a lawyer when investigators arrived at his office on May 31. He was told he could not do so during an active investigation.
He also did not provide some of the financial documents requested and would not say what happened to the money, saying this could reveal incriminating information and therefore he needed to consult with a criminal lawyer.
That investigation is ongoing. Meanwhile, Maines says he had a “tremendous amount of interest” from other law firms to take his e-gaming case, and has retained John W. MacDonald from MacDonald, Ross Barristers & Solicitors, based in Cambridge, Ont. MacDonald’s background in spoliation cases and those involving destruction of documents made him particularly well suited for the e-gaming case, Maines added.
CMT and 7645686 Canada Inc. filed a new statement of claim against the P.E.I. government and eight other parties in the P.E.I. Supreme Court in March, seeking damages of $50 million for allegations that include misfeasance in a public office by several of the defendants.
It is the second statement of claim filed by the companies, after the first was struck out last year.