In this age of technology, the risk of departing employee theft and fraud has increased substantially. Departing employees are no longer limited to removing printed confidential business information, but can abscond with business information, trade secrets, client contacts, and other similar material using, for example, an external disk drive or an external email account.

How can companies protect themselves from departing employee related theft and fraud?
Continue Reading Departing employee data fraud on the rise

In Century Services Inc. v. New World Engineering Corp., the Ontario Superior Court of Justice held that defendants – found liable for having bilked investors out of $20 million – could not claim contribution and indemnity from their lawyers and the lenders in their scheme.  This, despite the fact that the Court concluded that the lenders – and at least a few of the solicitors involved – failed to carry out their due diligence responsibilities.
Continue Reading Club promotors found liable for fraud cannot claim indemnities from third parties

In Canada Mortgage and Housing Corp v. Gray (Canada Mortgage and Housing Corp v. Gray, 2013 ONSC 1986), the Canada Mortgage and Housing Corporation (“CMHC”), the insurer of mortgages, attempted to block the release of a mortgage debt from a bankrupted individual who was a victim of a fraudulent scheme, but in CMCH’s view, was either aware of the scheme or that he was reckless and/or willfully blind to the scheme.
Continue Reading When would silence or non-disclosure of material facts amount to fraudulent misrepresentation?

Dividing up a shortfall from a Ponzi scheme was first posed before the United States Supreme Court in 1924. The infamous case of Cunningham v. Brown dealt with the original Ponzi scheme of Charles Ponzi and distributing remaining funds back to victims when his investment scheme was finally unravelled, but left victims with only a fraction of their original investments. Unraveling a Ponzi scheme to return a shortfall of money back among its victims is akin to untangling the noodles in a half-eaten bowl of spaghetti at a buffet and trying to determine who cooked each strand. Where multiple chefs (all using the same recipe) all had their spaghetti thrown in one giant pot, it would be a seemingly impossible task to untangle the half-eaten bowl to see which chefs’ spaghetti was still in that bowl.
Continue Reading How should a Court divide a shortfall of money among victims of a Ponzi Scheme