Bombing suspect faces lawsuit
$80-million class-action suit filed
Already accused of killing a client with a parcel bomb, a Red Deer financial adviser is now at the centre of an $80-million class action lawsuit alleging he put his financial interests ahead of investors.
The civil suit, filed in Court of Queen’s Bench in Red Deer, alleges Brian Andrew Malley used a “one-size fits all” strategy designed to benefit himself rather than considering the goals and instructions of his clients.
“Brian Malley systematically failed to obtain the informed consent of class members with respect to the transactions and risks undertaken on behalf of the class members,” the statement of claim reads.
One of the lawyers handling the suit says his firm has so far identified approximately 90 clients handled by Malley, who worked for Assante Wealth Management in Red Deer. “There are others out there we haven’t spoken with. We’ll have a better idea of the magnitude of the suit once we’ve spoken with them,” said Carsten Jensen of JSS Barristers, who added there could be as many as 300.
Malley, 55, is charged with first-degree murder in connection with the killing of one of his clients, Victoria Shachtay.
Shachtay, a quadriplegic who used a wheelchair, was killed in November 2011 by an explosive inside a parcel delivered to the Innisfail home she shared with her young daughter and a live-in caregiver.
Shachtay’s daughter wasn’t home when the bomb exploded. The caregiver was home, but wasn’t hurt.
Shachtay, 23, was paralyzed in a car crash in 2004, and received a large financial settlement after the incident.
Assante is named as a defendant because it allegedly didn’t take steps to safeguard the interests of Malley’s clients after he was charged with murder.
“Assante failed to reassign the investor accounts that had been managed by Brian Malley and completely disregarded the class members, allowing the investment accounts to incur further losses,” the statement of claim reads.
Allegations in the lawsuit are unproven in court. No statements of defence have been filed on behalf of Assante, Malley or his wife, Christine, who is also named as a defendant.
The statement of claim alleges she had oversight over her husband’s dealings at Assante.
In a written statement Wednesday, Assante said it has not yet been served with the statement of claim.
“Assante has been working with a number of clients and former clients to resolve certain concerns related to the handling of their accounts by Brian Malley,” the company said.
“In our experience, it is extremely unusual to advance such claims through a class-action proceeding.”
The suit also alleges that prior to Malley’s arrest, Assante failed to properly supervise his clients’ accounts and failed to notice unusual trades.
Malley allegedly made frequent and unnecessary trades to collect additional commissions from clients, the suit says.
The statement of claim also alleges Malley broke company rules limiting ownership in a single security by heavily investing in two companies.
The investments in An-dover Mining and Petrostar Petroleum were allegedly “to manipulate the price of the securities for his own benefit and the benefit of his wife, the defendant Christine Malley,” the claim reads.
The lawsuit is seeking $50 million for losses allegedly suffered by investors, $20 million in general damages and $10 million in punitive damages.
The suit must be certified by a judge before it can proceed. If a judge certifies the suit, it would include all former clients of Assante whose portfolios were handled by Malley.