Kelowna lawyer involved in Ponzi scheme disbarred
KELOWNA — A Kelowna lawyer has been stripped of his rights to practice law. On Monday, the Law Society of B.C. disbarred Doug Welder after finding he had committed professional misconduct in relation to a Ponzi scheme. In its decision on disciplinary action, the law society says Welder was acting for a company, called International Fiduciary Corporation (IFC), that was being investigated by the B.C. Securities Commission (BCSC).
In its decision, the law society states that “on November 1, 2006 the BCSC issue[d] a cease trading order (“CTO”) prohibiting further investments in the IFC. The evidence
established that the Respondent knew of the CTO, even to the extent of opening a file on November 7, 2006 for one of the principals of IFC and identifying the matter as “BCSC Cease Trade Order.”
Despite Welder’s knowledge of the CTO, the law society says he transferred money from seven different people into his trust account. From there the money was either transferred to IFC, another person or company, or he otherwise failed to return the funds to the investors. The total amount of money involved was more than $1.5-million. According to the law society, Welder didn’t tell the investors that he wasn’t protecting their interests.
In its decision, the law society indicates that Welder accepts his conduct is serious and deserving of significant penalty, but not as significant as disbarment.
“[He] says that neither disbarment nor a finding of ungovernability is appropriate as his past conduct has not been marked by dishonesty or by a failure to adhere to the authority of the Law Society,” according to the hearing panel’s decision. “His position is that, as he is currently not a practising member, the appropriate sanctions are a suspension of two years, costs with 18 months to pay and appropriate conditions on any application for reinstatement in order to protect the public.”
In its decision, the law society says the protection of the public is its primary consideration.
“As was stated in Law Society of BC v. Lessing, 2013 LSBC 29, at par. 61, this consideration is wider than simply ‘protecting the public from lawyers who might, for instance, steal monies from clients. It has a much broader meaning. It includes public confidence in lawyers generally.'”
However, the discipline counsel decided disbarment is the only sanction that is appropriate for Welder because of the nature of his misconduct and his professional conduct record.
In the decision, discipline counsel’s “position is that [Welder’s] professional conduct record shows a pattern of failures to abide by his professional obligations, with his explanations often being that he has failed to understand or appreciate those obligations.”
In his written submissions, Welder admits his actions had “serious repercussions to those that deposited funds into my trust account.”
Global News tried to contact Welder at his Kelowna law office Friday, but he indicated he has no comment about his disbarment. The full decision of the hearing panel can be viewed below.