The Nova Scotia Supreme Court has ordered two investment firms to pay more than $1.4 million to a group of investors who lost money because of a bad investment adviser.
The ruling against Keybase Financial Group Inc. and Global Maxfin Investments Inc. stems from the actions of John Alexander Allen.
Allen had been an investment advisor for nearly 20 years and spend some of that time with Keybase's Truro office.
Allen took out loans in his clients' names and invested the money in high-risk investments without their knowledge.
When the markets took a downturn, his scheme was discovered and he was charged with 21 counts of forgery and fraud. Allen agreed to plead guilty to four of the fraud charges and the others were dropped.
No jail time, but a $1M fine
Allen was handed an 18-month conditional sentence, broken down to nine months of house arrest and nine months with a curfew. He also has to serve 300 hours of community service.
The Nova Scotia Securities Commission fined Allen more than $1 million.
Some of the investors who lost money because of Allen launched a lawsuit against him and the investment houses.
Keybase and Global Maxfin were found liable in a decision released earlier this year. In a decision released Thursday, Justice Robert Wright assessed how much they should pay.
The $1.4 million will be split among 19 investors named in the lawsuit. In addition, they're getting $310,000 in costs and $120,000 to cover their disbursements.