Insurance agent bilked 13 investors of $2 million: securities commission
A B.C. Securities Commission panel has found that a former insurance sales agent perpetrated a fraud on 13 investors by using their money for personal use, including gambling.
The commission panel found that in 2009 and 2010 Lynne Rae Nickford, also known as Lynne Rae Zlotnik, convinced 13 investors to loan or invest nearly $2 million in her Vancouver-based company, LZ Wealth Management.
She told the investors — 11 individuals and two couples — that their money would be used for the company’s operations and to grow the business. In most instances, Nickford offered investors rates of return ranging from 12 to 16 per cent, although one investor was to receive 25 per cent. She issued either promissory notes (a signed document containing a written promise to pay a sum of money to a specific person on a specific date) or “private-investment” documents.
The panel, in a decision released this week, found that Nickford spent at least $318,000 of the investors’ money on personal expenses unrelated to her business. Those included personal loan payments, personal expenses and cash withdrawals in Las Vegas and local casinos, as well as payments to local casinos, according to the panel report of its findings.
The investors’ funds were put at risk when all the money wasn’t used for Nickford’s business as intended, concluded the panel.
“With the subsequent bankruptcy of the respondent and her business, the investors’ funds were lost,” the panel wrote in its 19-page decision.
Nickford had been active in the financial-advice sector since the early 1990s, first as a registered scholarship fund saleswoman from 1991-93 and then as a mutual-fund saleswoman from 19982008.
She worked part of that time at the firm her father Harold Zlotnik founded, Zlotnik Lamb & Co. (now ZLC Financial Group).
Nickford couldn’t be reached for comment Tuesday.
In her defence, Nickford submitted she was suffering from mental and physical illness from 2008-10, and argued had she not been ill she would have been able to handle her business, wouldn’t have gambled and would have continued to pay back investors.
The panel dismissed this argument, noting, in part, that the medical evidence didn’t establish that Nickford was suffering from the alleged mental illness during the relevant period.
In the panel’s decision, it was noted that B.C. Lotteries Corp. officials told the commission that Nickford was in the top one per cent of slot players, playing daily and sometimes multiple times at the Edgewater Casino in Vancouver in amounts of $5,000 to $10,000 per day.
The panel’s decision comes five years after the allegations were formally filed by the securities commission.
A panel hearing had been adjourned seven times on Nickford’s application of ill health. However, eventually, the panel decided the hearing must proceed because it said there was a serious risk that a further adjournment would permanently damage the securities commission’s ability to obtain witness co-operation.