Morton Dew and Cuddy Financial heads declare bankruptcy
Frank Harrison Dew and David Hamilton Cudmore and their companies are under investigation by the justice dept.
Two Island businessmen who are currently the focus of a securities and insurance investigation have declared bankruptcy and are being ordered by P.E.I. Supreme Court to repay hundreds of thousands of dollars to a client.
The owner of the financial planning company Morton Dew Limited, 48-year-old Frank Harrison Dew of Charlottetown, filed for bankruptcy in Supreme Court July 29, as did David Hamilton Cudmore, owner of Cuddy Financial Management Group.
Both men and their companies remain under investigation by the P.E.I. Department of Justice.
"We have received about 100 complaints, either via telephone or emails to this point," said Phillip McInnis, an insurance compliance officer with the department.
"So we will follow up [on] each one of those. If there are still people out there who would like to contact us, by all means, do so."
Late last week, the Supreme Court ordered Dew and Cudmore to pay more than $300,000 to a former client who had filed a lawsuit against them. That lawsuit, which Dew and Cudmore did not contest, lays out allegations against the insurance and investment dealings of the two men and their companies.
Insurance firm suing Dew
In the lawsuit, the former client claimed to have been paying life-insurance premiums "regularly and faithfully" to Cudmore and Dew.
But the lawsuit states, "The plaintiffs were appalled to discover their life-insurance policies were no longer in good standing" with the insurer.
The lawsuit also claimed Morton Dew Limited defaulted on a $300,000 loan the client made to the company, which was to have been used to purchase investment products, but allegedly never was.
An insurance-industry firm called PPI Solutions Atlantic is also suing Dew for repayment of $162,187 in insurance-policy sales commissions.
No statement of defence has yet been filed in that case.
Neither Cudmore nor Dew has responded to messages by CBC News.
According to the bankruptcy filings, Cudmore is more than $300,000 in debt, about half of which is owing to the Canada Revenue Agency.
Dew owes $2.3 million, much of that to insurance companies.