The Advisory: Volume 10, Issue 3, July 2012
Summary of Disciplinary Matters
In this Summary of Disciplinary Matters, the Law Society of Alberta seeks to educate and inform lawyers on its role as an independent regulator in the public interest.
All hearing reports are available at www.lawsociety.ab.ca under Lawyer Regulation/Hearings & Outcomes/Hearing Reports.
Suspension of A
A Hearing Committee of the Law Society recognized that a joint submission for a three-month suspension barely falls within an acceptable sanction range but was not demonstrably unfit and thus was appropriate for an Alberta lawyer who was an unwitting dupe in a Ponzi scheme.
In issuing its decision on sanctioning, the Committee expressed that its objectives are to ensure the public is protected and that the public maintains a high degree of confidence in the legal profession.
The Alberta lawyer, known as “A.” was lured into an investment fraud which lasted multiple years, involved transactions totalling approximately $48 million, and attracted hundreds of investors. A. undertook multiple roles and became increasingly involved in the scheme over a period of two years. The banking services he provided as a lawyer were extensive and essential to the operations of the masterminds behind the fraud.
For his part in the overall fraud, in total, A. processed about 2,000 bank transactions including $24.8 million on behalf of Corporation A. He also issued approximately 16,000 cheques or wire transfers. He also disbursed approximately $1.63 million in cash card payments. In issuing thoughtless comfort letters, A.’s status as a practising lawyer was used by the masterminds to influence potential investors.
A. was found guilty on five citations. Two citations were dismissed. Immediately upon citations being directed, A. indicated his intention to provide a guilty plea. This plea indicated genuine remorse and generated substantial savings involved in the estimated two-week hearing.
The Hearing Committee found that A. had no previous disciplinary record. As well, his practice has continued under restrictions and without incident for almost seven years. The Committee also found that he no longer has a solicitor’s practice. At the time of his involvement with the Corporation, he conducted a mixed solicitor and litigation practice. Shortly after the Section 63 hearing imposing restrictions, he deliberately moved to practice litigation only. This was a direct effort to avoid further corporate misdealings. More significantly, it offers protection to the public as A.’s misconduct related exclusively to his role as solicitor.
The Committee noted in its report that while A.’s “conduct is clearly deserving of sanction, it is equally apparent that he did not act with full knowledge or in bad faith. Rather, his misconduct arose from a regular failure to verify crucial and troubling information. His naïve reliance on assurances from Corporation A. parties was unacceptable especially as warning signs accumulated. Although mistaken and misguided, A. did not act with mala fides. In effect, his moral culpability is lessened.
Under all the circumstances, the Hearing Committee ordered, pursuant to Section 72(1) (b) of the Legal Profession Act, that A. be suspended for three months. The Committee also ordered that he pay costs of $6,100.25 to be paid within six months of reinstatement.
The Hearing Committee was comprised of Larry Ackerl, QC, Chair and Bencher; Nancy Dilts, QC, Bencher; and Amal Umar, Public Representative.
Reprimand and Fine of B
For failing to supervise support staff and to honour undertakings, a Law Society Hearing Committee issued a reprimand and fined an Alberta lawyer.
In its report, the Hearing Committee referenced author Gavin McKenzie’s points in Lawyers & Ethics: Professional Responsibility and Discipline that the “seriousness of the misconduct is the prime determinant of the penalty imposed.”
B., who had no discipline record, admitted that his failure to supervise support staff assigned to deal with a mortgage transaction and his failure to honour all undertakings given to another lawyer was conduct deserving of sanction.
The Hearing Committee also referred to McKenzie’s observations that “the purposes of law society discipline proceedings are not to punish offenders and exact retribution, but rather to protect the public, maintain high professional standards, and preserve public confidence in the legal profession.”
The Hearing Committee also noted that “if a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of the profession whose reputation depends on trust.” (Bolton v. Law Society  2 All ER 486 at 492 (C.A.), per Sir Thomas Bingham MR for the court)
After due deliberation, the Chair delivered a reprimand, reinforcing that undertakings must be fulfilled. B. was ordered to pay a fine of $1,000, and the actual costs of the hearing.
The Hearing Committee is satisfied that the interests of the public are served and protected by such a sanction.
The Hearing Committee was comprised of Rose M. Carter, QC, Chair and Bencher; Donald Scott, QC, then Bencher; and Wayne Jacques, Public Representative.
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