Tag: 104K

A Calgary judge handed down a seven-year prison sentence to an investment advisor who bought more than $6 million of a high-risk oil and gas stock and then accepted a secret commission of $104,000 from the company where his close friend was a vice-president.

Last September, Jeffrey Ber, 42, was convicted of two counts of fraud over $5,000 and accepting a secret commission from Blackbird Energy.

On Thursday, Court of King’s Bench Justice Eleanor Funk agreed with prosecutor Colin Schulhauser, who asked for a six-year sentence for the fraud charges plus a one-year term for the secret commission offence. 

“Mr. Ber’s actions directly undermine the trust and confidence that all investors should have with the people and institutions they entrust with their financial security,” wrote Funk in her 14-page sentencing decision.

“Mr Ber’s offences were planned, deliberate, executed over several weeks and committed for personal gain.”

Funk’s decision breaks down as a six-year sentence for the fraud against TD, where Ber worked as an investment advisor, a five-year sentence (to be served concurrently) for the fraud against TD’s clients, and a one-year prison term to be served consecutively for the secret commission conviction. 

On top of his prison term, Ber is also required to disclose his fraud convictions before accepting any financial jobs or volunteer positions for the next 10 years.

The Crown had also sought a $681,000 restitution order to make up for what TD paid to reimburse clients once share prices had dropped.

In her sentencing decision, Funk said she could not quantify TD’s loss resulting from Ber’s offences.

“There is no doubt that TD suffered actual losses,” said Funk.

“Because I am unable to address those losses through a restitution order, I have addressed them through imposing a longer period of incarceration in relation to Mr. Ber’s fraud against TD.”

$6 million in high-risk shares

Ber’s crimes began in 2017, when Ber was close friends with Blackbird’s vice-president of business development, Josh Mann. 

Details of the frauds come from Justice Funk’s conviction decision.

At the time, Blackbird was a small, publicly traded, Calgary-based oil and gas company.

In the early part of 2017, Blackbird had a goal of raising $80 million through a new share issuance to be offered at an initial price of $0.55 per share. 

In March, Ber sold millions of dollars of his TD clients’ existing investments and then placed $6 million of the high-risk Blackbird shares in their investment accounts. 

A $104K cheque

The move instantly put many of the accounts “offside with their designated risk tolerance,” Funk noted. 

Ten days later, Ber cashed a cheque for $104,000 from Blackbird Energy.

Funk found that Ber knew he would receive payment for his “aggressive placement” of shares into client accounts. 

The judge also took into account Ber’s personal spending in the weeks leading to the new share issue, which she found showed he expected to come into a significant amount of money. 

Over a month-long period, Ber bought a $43,000 watch and made another $30,000 in purchases. 

Lavish spending

On March 29, 2017, when Ber deposited the Balckbird cheque for $104,000, he immediately made a credit card payment of $75,000, suggesting that the fraudster “had already earmarked the bulk of his commission cheque to pay for his lavish spending the previous month,” the judge noted. 

After TD discovered Ber’s fraud, the financial institution reversed the transactions, reimbursing clients the full purchase price despite Blackbird then trading below its initial per-share price of $0.55.

In their sentencing arguments, defence lawyers Alain Hepner and Kelsey Sitar told the judge that Ber is a cancer survivor with no criminal record, many letters of support and a reputation for volunteerism in the community. 

In her final remarks, Justice Funk wished Ber “good luck.”

“Me Ber, I take no pleasure in sending you into custody,” she said. “You have heard … how seriously these offences are treated in our justice system.”

“You are no doubt going to enter a difficult chapter in your life as you go into custody. This is one chapter, and when this one ends, there will be another chapter waiting for you.”