Assets of vanished Montreal investment adviser frozen

Quebec's securities regulator has ordered the assets of a small Montreal investment firm frozen after several investors came forward complaining they had stopped receiving payments and the owner of the firm could not be reached.

Securities regulator says up to $50 million diverted in a kind of Ponzi scheme

Quebec's securities regulator has ordered the assets of a small Montreal investment firm frozen after several investors came forward complaining they had stopped receiving payments and the owner of the firm could not be reached.

In a press release, the L'Autorité des marchés financiers says it has ordered a stop "to all activity, direct or indirect" of the Earl Jones Corporation in order to probe its assets.

A message left on the answering machine of the longtime investment adviser based out of the Montreal suburb of Pointe Claire earlier today suggests investors might not see their money again.

"If you are calling regarding your account with us, we are not in the position to remit your funds," a male voice on the recording says.

"In the meantime, phone calls and mail will not be answered."

Earl Jones has managed assets and estates for more than 20 years.

Several clients have come forward and told CBC News they have stopped receiving regular payments related to their investments, and that Jones is nowhere to be found.

Quebec's financial watchdog said based on information it has collected, Jones is suspected of diverting between $30 million and $50 million in investments belonging to about 50 investors.

The regulator believes most of the investors who are affected are residents of Quebec but said some could be from elsewhere in Canada and the United States.

Jones's business appears to resemble a Ponzi scheme, it said.

On Friday morning, Jones was not answering phone calls.

The only information on offer was the brief recording on his answering machine.

Investors fear the worst

A group of Montreal investors is worried about its money after cheques from the financial adviser began bouncing. None of the investors who have come forward has succeeded in reaching Jones.

Investors say he brought back high returns on their money. But a few weeks ago, they started having problems contacting him after promised money failed to come in.

Boston resident Peter Kent's mother has more than $500,000 invested with Jones and has been his client for a number of years.

A few weeks ago, the Pointe-Claire retirement home where his mother lives called to say it wasn't receiving its monthly payments out of the funds.

Kent tried to contact Jones numerous times but couldn't reach him, so Kent drove into Montreal, only to discover that Jones's office, in a glass tower on Montreal's West Island, was locked. And he still wasn't returning phone calls or emails.

"[I] trusted him totally," Kent said.

Kent's experience is not unique. CBC News contacted at least half a dozen people who also have their money with Jones but who haven't been able to reach him of late.

Investor David Hayden has known Jones for 30 years and has about $400,000 invested with him. Hayden said he noticed Jones's behaviour started to change a few weeks ago.

"Phones calls were not getting returned, meetings were being cancelled and emails were not being answered," he said. "Money that was expected from divested investments just didn't show up. Tax bills weren't paid, stuff like that."

'It's going to be ugly'

CBC News also tried to reach Jones, but there was no response to multiple messages left on his various phone lines.

"I was shocked," Hayden said. "You go through all that immediate anger, and you blame yourself for not realizing something may have been going on sooner."

Brook Hamilton said his mother, who lives in Beaconsfield, west of Montreal, has invested about $350,000 and even refinanced her home after Jones persuaded her to do so.

Hamilton said his mother stopped receiving regular monthly payments more than a month ago.

"It's going to be ugly, and it's going to be big, because this affects dozens and dozens of families and their extended families, and everyone else," Hamilton told the CBC from his home in Atlanta.

Montreal police declined to confirm whether Jones is under investigation, but a spokesperson said they have recently received several complaints about a financial adviser working on the West Island.

"We don't know how much of a house of cards all this was," Kent said. "Who knows how much is still there. That's the big question for everybody."