David Singh arrives at the court house at Old City Hall in downtown Toronto on March 2, 2020.Yader Guzman/The Globe and Mail
The founder of what was once one of Canada’s largest financial planning companies has been sentenced to 3½ years in prison and ordered to pay more than $4.8-million in restitution for defrauding investors.
David Singh, a money manager and personal-finance author, was sentenced this week by Ontario Justice Mara Greene, who previously found that Mr. Singh had defrauded dozens of investors who were told their money would be used to fund residential mortgages.
The prosecution was conducted by the Ontario Securities Commission, which opted to try Mr. Singh in court rather than before one of its adjudicative panels, which are less punitive and do not have the power to issue jail sentences.
The OSC alleged that two mortgage investment corporations founded by Mr. Singh – Rockfort MIC and Greenview MIC – raised about $5.6-million from 77 investors between 2014 and 2018 and that some of the funds went toward private-school tuition for Mr. Singh’s children, a sports car and to pay back other investors.
Mr. Singh was convicted of three offences under the Ontario Securities Act: fraud, trading securities without registration and trading securities without issuing a prospectus.
David Singh convicted of defrauding mortgage firm investors
Former financier paid for sports car, private school tuition with investor money, court told
In a November, 2021, ruling, Justice Greene said there was much evidence that “Mr. Singh knew he was required to fund mortgages and was intentionally not doing so.”
Mr. Singh, who lives in Richmond Hill, Ont., could not be reached for comment.
The jail sentence is a remarkable turn for someone who was a high-flying entrepreneur in the early 1990s. The financial advisory firm he founded, Fortune Financial Management, managed more than $7-billion in client assets in the mid-1990s.
But later that decade, Mr. Singh had his first scrape with the OSC. The regulator launched an investigation into Fortune’s star salesman, Paul Tindall, who was accused of selling unsuitable investments to clients. The OSC then turned its sights on Mr. Singh, alleging he had failed to properly supervise Mr. Tindall. Both men reached a settlement with the commission and received temporary trading bans.
Mr. Singh sold Fortune to Dundee Wealth Management in 1999.
His recent foray into the mortgage investment business came crashing down when a former chief financial officer for Rockfort approached the OSC with concerns that the business was engaged in fraud.
In a statement, OSC director of enforcement Jeff Kehoe said frauds like the one orchestrated by Mr. Singh have a devastating impact on victims and their families.
“The sentence imposed today sends a strong message that individuals who deceive investors and misappropriate their funds will be held accountable for their misconduct,” Mr. Kehoe said.
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Greg McArthur