The Law Society of BC has reached a settlement with North Vancouver securities lawyer William Lorne MacDonald, who has agreed to a 15-year suspension after admitting he allowed his law firm to be used as a vehicle for offshore stock fraud schemes.
In a statement posted online Nov. 15, the society said MacDonald “admitted that in the course of acting for several clients, he continued to allow the use of his trust account where he ought to have known it was being used to facilitate unlawful or dishonest conduct.”
MacDonald assisted his clients in a fraudulent scheme to manipulate the U.S. stock market including making “representations” to his client’s Hong Kong counsel (in response to an inquiry from a securities regulator) “that he ought to have known were false or inaccurate.”
MacDonald admitted he moved money through his trust account without providing any legal services and without making reasonable inquiries about the circumstances of the transactions.
In Canada, due to charter-protected solicitor-client privilege, lawyers’ trust accounts are not regulated by Fintrac, the national financial transactions agency that enforces the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. As a result, it is up to the society to police trust accounts and ultimately uphold the integrity of the legal system.
MacDonald also agreed to not apply to practice law anywhere in the world without first notifying the society. And should the lawyer, who has practiced since 1999, choose to reapply for a licence he must demonstrate he is of good character and fitness to practice law via a credentials hearing.
MacDonald was not fined by the society.
“The law society recognizes that misconduct by lawyers that facilitates securities fraud poses significant risks to the public, and takes such matters very seriously. The law society appreciates the cooperation of the U.S. Securities and Exchange Commission in this investigation,” the statement reads.
MacDonald admitted he moved money through corporate offshore accounts, including the British Virgin Islands and Hong Kong “in objectively suspicious circumstances,” according to the admission of misconduct and undertaking.
In many instances, MacDonald would incorporate companies without properly verifying identification.
MacDonald’s citation specifically references the movement of about US$3.5 million and just over C$420,000 through his accounts for the transactions in question.
MacDonald first attempted to keep the citation from public scrutiny by applying to the society for an anonymization order; however, a society hearing panel ruled Jan. 30 there were no grounds to justify the application.
Part of his stated reason was to shield scrutiny of the Canucks Autism Network, for which he was the chair of the board of directors. The charity’s website shows MacDonald is no longer on the board.
The society said the companies and charity have an interest in knowing of the allegations. The society also noted MacDonald’s “role in the companies and the charity do not outweigh the public interest in publication.”
MacDonald is a prolific participant in Vancouver’s investment industry, working as a director or legal consultant of dozens of junior public companies since being called to the B.C. bar in 1999. The society states he has recently wound down his practice (at MacDonald Tuskey) and closed the firm’s physical office. The firm no longer has an online presence, as well.