Fraudster’s reported financial situation complicates BCSC’s effort to collect $618K
The B.C. Securities Commission has fined and permanently banned Vancouver resident Lynne Rae Nickford from the province’s investment markets.
Her penalties total $618,141, but it’s unclear whether the commission will ever collect a cent from Nickford.
She declared bankruptcy in 2010 and none of the investors that she bilked have seen any funds returned.
Nickford has told the commission she is not in a position to pay any monetary sanctions because she has a limited income, no assets, no expectations of inheriting money, and no one from which to borrow money, according to the penalty decision released this week.
Nickford, also known as Lynne Rae Zlotnik, had convinced 13 investors to lend about $2 million between 2009 and 2010, purportedly to fund her financial services company Lynne Zlotnik Wealth Management, but some money was used to pay for personal expenses including food, clothing, rent and gambling in casinos in Vancouver and Las Vegas, a commission tribunal found. If Nickford, who is in her late 60s, does not pay her penalty, she will join a long list of financial fraudsters in British Columbia who have not done so in the past decade.
A Postmedia investigation published last November found the commission has collected less than two per cent of $510 million in penalties it issued from fiscal 2007-08 to 2016-17.
The B.C. Securities Commission would not say Tuesday whether it expects to collect money from Nickford or what steps it has taken to do so.
“We do not publicly disclose the collection strategies for individual cases, so as not to undermine our collections efforts,” commission spokeswoman Alison Walker said in a written response.
Nickford has not faced any criminal prosecution, not unusual in British Columbia, where the Postmedia investigation also found that criminal prosecution for financerelated offences is a rarity.
The commission was not able to track all of the $2 million invested, but a tribunal concluded last year that Nickford had defrauded the 13 investors of at least $318,141.
She was fined $300,000 in an administrative penalty and ordered to pay back the $318,141.
The commission tribunal that issued the penalties said Nickford’s conduct was particularly egregious. “In the guise of supporting investors and providing investor education and empowerment, she preyed on clients of her financial services firm, her friends and members of her religious community, many of them in or nearing retirement,” wrote the tribunal, whose chairwoman was Suzanne K. Wiltshire.
The tribunal stated the sanctions it imposes must be sufficient to ensure that the respondents and others will be deterred from engaging in similar misconduct.
However, investor advocates, experts and victims have questioned the deterrence value of penalties that are not collected.