The British Columbia Securities Commission has secured a British Columbia Supreme Court declaration that a $6.8 million disgorgement order against Thomas Arthur Williams will remain enforceable even if he is discharged from bankruptcy. The court granted the BCSC’s application by applying the Supreme Court of Canada’s 2024 test that disgorgement survives bankruptcy where it was imposed for misconduct involving “false pretences or fraudulent misrepresentation,” finding a direct link between the disgorgement debt and Williams’s deceitful conduct. A BCSC panel found in 2016 that Williams, a former registered mutual fund representative, masterminded a Ponzi scheme that raised approximately $11.7 million from 123 investors between February 2007 and April 2010, and ordered disgorgement alongside a $15 million administrative penalty, with no amounts paid to date. The release also notes that the Supreme Court of Canada held administrative penalties do not survive bankruptcy discharge, and that the BCSC has been engaging federal officials on adding securities regulators’ financial sanctions to the Bankruptcy and Insolvency Act list of debts that survive discharge. Williams applied for bankruptcy in 2021 and sought a discharge in 2023, which the BCSC and the court-appointed trustee opposed and which has been adjourned indefinitely.
British Columbia Securities Commission 2025-06-19
British Columbia Securities Commission obtains court ruling that $6.8 million disgorgement order survives bankruptcy discharge
The British Columbia Securities Commission (BCSC) secured a Supreme Court declaration that a $6.8 million disgorgement order against Thomas Arthur Williams remains enforceable despite potential bankruptcy discharge. The court applied the Supreme Court of Canada's 2024 test, linking the disgorgement to Williams's fraudulent conduct in a Ponzi scheme. The BCSC is engaging federal officials on including securities regulators' financial sanctions in the Bankruptcy and Insolvency Act's list of debts that survive discharge.