Clients of bankrupt investment dealer Thomson Kernaghan will see all of their losses covered by the brokerage industry's compensation fund.

The losses which amount to $18.1 million will be absorbed by the Canadian Investor Protection Fund (CIPF) the compensation program set up by the industry to cover clients who lose money through the collapse or insolvency of their investment dealer.

Thomson Kernaghan had about 15,000 clients at the time of its collapse. Most of them have already been reimbursed and have had their accounts transferred to new investment dealers.

The $18.1 million payout from the CIPF is one of the largest in the fund's history. In the previous 33 years of the fund's existence, it has paid out a total of $36 million.

Thomson Kernaghan filed for bankruptcy this summer after it was suspended for a capital deficiency. Its former chairman, Mark Valentine, was subsequently arrested in Germany and charged following FBI sting investigations into securities fraud and money laundering. Valentine was charged with securities fraud and conspiracy but was not charged in relation to the money-laundering sting.