Achi news desk-
The founders of a Saskatoon real estate investment firm that left investors with millions of dollars in losses have reached a settlement with Saskatchewan’s financial and consumer watchdog.
In a settlement with the Financial and Consumer Affairs Authority (FCAA) approved earlier this month, Rochelle Laflamme and Alisa Thompson, founders of the now-defunct company Epic Alliance, have agreed to pay fines totaling $300,000, and they are restricted from selling and promoting investment products for 20 years.
In 2022, a court-ordered investigation found that $211.9 million dollars invested in the company by multiple investors had largely disappeared.
The collapse of Epic Alliance resulted in significant financial losses for more than 120 investors, mostly from British Columbia and Ontario.
The company offered a “hassle-free” landlord program – offering home management for out-of-state investors.
Under the landlord program, the investor would take out the mortgage on the home and Epic Alliance would take responsibility for finding tenants and maintaining the property.
Many of the homes were actually empty as the company had promised the investor a guaranteed 15 per cent rate of return on their investment.
A Saskatoon lawyer representing some of the investors told CTV News in 2022 that the pair were “using new money to pay off old money.”
“Investment products should generate returns on their own, not by acquiring new money,” says Mike Russell.
The company also offered a “fund-a-flip” program, where investors could buy homes through Epic Alliance – which would oversee improvements and upgrades – and then sell for a profit, often advertised as a 10 percent profit on a year. investment.
In their settlement with the FCAA, Laflamme and Thompson admit to selling investments when they were not licensed to do so, and continuing to raise investment funds after the FCAA ordered them to stop.
What the settlement does not address are any allegations of fraud.
“The settlement agreement is silent on the issue of misrepresentations and/or fraud,” the FCAA panel wrote in its April 5 decision.
“There are no facts before the panel to evaluate whether the respondents had engaged in misrepresentations or fraud against their investors. Furthermore, the statement of allegations did not allege that the respondents’ conduct was fraudulent … the respondents’ culpability is limited to these specific offenses in the Securities Act.”
Because no fraud was found, the FCAA ruled that there was no need to permanently bar Laflamme and Thompson from the investment industry.
“A permanent ban is not appropriate under these circumstances given that there is no agreement or finding that the respondents are fraudulent,” the decision states.
“A 20-year ban from participating in Saskatchewan’s capital markets is significant.”
While the FCAA acknowledges the impact Laflamme and Thompson’s conduct had on their investors, the settlement does not include any compensation for them.
According to the FCAA, 96 investors paid an estimated $4.3 million to Epic Alliance over six years.
In January 2022, Laflamme and Thompson held a Zoom meeting to inform investors of the company’s imminent demise.
According to a transcript of the call included in a court filing, the company’s financial situation was described as “interlacing s–t.”
“Unfortunately, anyone who had any unsecured debts … it’s all gone. Everything is gone. There’s no business left and that’s what it is,” the transcript said.
Laflamme and Thompson started Epic Alliance in 2013.
—With files by Keenan Sorokan
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The mail Sask. real estate company that lost investors millions reaches settlement – CTV News Saskatoon appeared first on Canada News Media.
