MONTREAL - Victims of Earl Jones and RBC have settled a multi-million dollar class action lawsuit out of court.
The bank has agreed to pay $17 million to people who were defrauded by the disgraced financial advisor.
The proposed settlement still has to be approved by the courts, but Joey Davis, who represents Earl Jones victims, said he is happy with the decision.
"This is an incredible situation, never seen before, so any money returned to them is a victory and we feel a 50 percent share is fair, fair satisfaction," said Davis.
Legal proceedings began in July 2010 when the victims were given court approval to launch a $40 million class-action lawsuit against the bank.
They argued the RBC branch on St. Charles Blvd. in Beaconsfield turned a blind eye to Jones's ponzi scheme.
The victims say internal documents from the St. Charles Branch in Beaconsfield indicate that Jones's misdeeds were known to bank managers in 2001, yet allowed to continue.
In a written statement the bank did not admit responsibility, saying "RBC has closely examined its role in providing Earl Jones with a bank account and is satisfied that it was not negligent."
Jones conned people for decades
Over nearly 30 years Jones swindled 150 clients out of nearly $50 million, usually by taking a large lump sum and promising them substantial returns.
In many cases Jones convinced people to take out mortgages on their homes in order to make investments.
However, the unregistered financial planner was really operating a ponzi scheme.
He never invested any of his clients' money, and instead gave them back a portion of their investment each month, as well as using the money to support his own lifestyle.
In order to keep his scheme going Jones recruited new investors through word of mouth and used their money to pay off other investors.
Jones's scheme fell apart in 2009 when several accounts were frozen because cheques were bouncing, in many cases cutting off the main source of income for retirees.
Since then Jones's victims have been struggling with sudden poverty.
"Some of them in fact have lost their homes or been forced to sell their homes. Some are facing near destitution," said Davis.
Many lawsuits pending
The RBC class action is just one of dozens of lawsuits victims have filed in the wake of Jones's actions.
Two brokers, Jean-Pierre Menard and Serge Leclaire, who work for RBC Dominion Securities are being sued for $1.5 million in a separate case.
Barbara Ellen MacLeod, executor of the estate of the late Julianna Katherine MacLeod, argues that for more than a decade the brokers did not properly monitor Jones's actions.
Earlier this year Electa McMaster was in court, arguing the fraudulent financial planner convinced her to give him a power of attorney over her affairs, then abused that trust to mortgage her house without her knowledge.
She is suing the notary and Industrial Alliance, the insurance firm that handled the mortgage, in a bid to save her home.
McMaster says neither the notary nor the insurance firm ever contacted her regarding the home.
Jones in prison
Jones went into hiding in June 2009 and after spending weeks out of sight he surrendered to police and confessed to swindling his clients.
He admitted forging signatures on cheques and convinced banking officials that he was authorized to make withdrawals from RRSPs and mortgages when he was not legally allowed to do so.
In February 2010 Jones was sentenced to 11 years in prison on two counts of fraud.
He will be eligible for parole in April 2013.
