Rep’s fraud convictions upheld

An Alberta court upheld fraud convictions against a former advisor with TD Wealth, but ordered a new trial on a count of accepting a secret commission, ruling that the trial judge failed to consider how the company that paid the commission described it in its audited financials.

In 2024, a former rep, Jeffrey Brian Ber, was convicted on two counts of fraud over $5,000 and one count of accepting a secret commission in connection with a junior resource company, Blackbird Energy.

According to court filings, in 2017, in connection with an $80-million offering that was co-led by TD, Ber bought more than $6 million worth of the company’s stock for his clients’ accounts, in some cases by first selling their existing investments to finance those purchases — and, about 10 days after that, Ber received $104,000 from the company.

The Crown alleged that Ber made those trades for clients without authorization — many of which violated the clients’ risk tolerances — and, that the payment from the company was made to induce those trades. Following a trial, he was convicted of fraud and accepting a secret commission.

Now, the Court of Appeal of Alberta has dismissed Ber’s appeal from the fraud convictions, but allowed his appeal on the secret commission charge and ordered a new trial on that count.

According to the court’s decision, on appeal, Ber argued that the convictions were unreasonable “and specifically that the trial judge erred in failing to apply the criminal standard of proof, engaged in illogical reasoning, and misapprehended evidence by failing to properly assess the credibility and reliability of witnesses.”

However, the appeal court concluded that trial judge made no reviewable error in analyzing the evidence and concluding that Ber acted dishonestly in several ways, and that there was no error in the judge’s finding that Ber exceeded his authority in trading clients’ accounts, that many of the investments violated clients’ risk tolerances, and that some of those risk tolerances were falsified. 

“We find no reviewable error in the trial judge’s findings and conclusion in either of the fraud convictions,” it said. “The convictions are not based on any error in the assessment of the appellant’s evidence or the evidence of the investors and TD witnesses.”

However, the court upheld the appeal from the conviction for receiving a secret commission — finding that the judge erred when she concluded that the only reasonable explanation for the payment from the company to Ber was that it was made in exchange for buying shares in the offering for clients.

That conclusion didn’t deal with the fact that the company characterized the payment as a consulting fee, or the significance of that description in the financial statements of a publicly traded company, the appeal court found.

“As a publicly traded company, strict rules safeguarded the accuracy of financial statements provided to market regulators and the investing public by the company,” the court noted, adding that the company’s chief financial officer certified that its financial statements contained no material misrepresentations.

Given that the trial judge didn’t grapple with the company’s description of the payment in the context of its financial statements, the appeal court found that there should be a new trial on that count.

Notwithstanding its ruling on that count, however, the court noted that it’s not necessary to find that he received a secret commission from Blackbird, “in order to find the elements necessary for fraud.”

“If the Blackbird payment was in fact a commission, that may have provided the appellant with a motive; but motive is not essential to fraud,” the court said.

“The fraud against the clients was made out by the dishonest act of placing the securities beyond the client’s risk tolerances, selling the investments they already had to do so, and failing to disclose to the clients that he was doing so. The fraud against TD was made out by the dishonest act of failing to disclose any relationship with Blackbird and falsifying client documents,” it added. “These findings were made separately from her conclusions regarding the secret commission offence.”

Last December, the Alberta Securities Commission ordered that Ber is banned from trading and registration for 10 years, based on his conviction. He was also sentenced to seven years in jail in January 2025.

Prior to that, in 2022, he was fined $70,000, ordered to pay $5,000 in costs and suspended for three years in a settlement with the Investment Industry Regulatory Organization of Canada for breaching the self-regulatory organization’s rules in connection with the Blackbird Energy offering.