Over 400 concerned investors — some who fear they have lost their life savings — attended B.C. Supreme Court in Vancouver Tuesday to follow proceedings in a case one claimant has described as a “Ponzi-like investment scheme.”
Victoria, B.C., mortgage broker Gregory Joseph Martel and My Mortgage Auction Corp. (MMAC), which also does business as Shop Your Own Mortgage, are at the centre of the case. Martel is sole director of MMAC and sells mortgage investments promising high rates of return.
Martel and his company have been hit with numerous lawsuits from individuals and businesses. On May 4, MMAC was put into a receivership overseen by Price Waterhouse Coopers.
Tuesday’s proceedings took place “ex parte,” meaning without the participation of Martel or his representative. Justice Shelley Fitzpatrick heard that process servers have been unable to find Martel in Victoria. Instead, a court summons was sent via email, which the court heard has not had a response.
$58M in, $58M out
Peter Rubin, counsel for the receiver, said Martel’s RBC bank account showed $58 million in deposits followed by $58 million in withdrawals, leaving a remaining balance of $279.
Two PWC reports presented in court also noted:
An MMAC document from Sept 2022 listing assets worth over $200 million.
MMAC paid Martel a dividend of $6.5 million in 2022.
MMAC offices in Victoria and Toronto were found to be vacant. Offices in California, Texas, Nevada and Florida have yet to be investigated.
Martel owns a highly mortgaged, multi-million dollar property in each of Victoria and Las Vegas and recently sold a similar property in San Diego.
Martel spent lavishly on private jets, luxury apartment rentals and concert tickets.
MMAC was integrated into a broader group of companies owned by Martel, between which funds were transferred.
Over 350 investors tuned in to the courtroom via video link, and another 50 attended in person. Fitzpatrick allowed a handful to speak.
“Members of the general public were enticed by promises of big returns,” said Kira Kelly of Victoria. “I really hope I haven’t lost my life savings.”
Ross Buck said he and others have gone through the formal MMAC process to have their investments paid out instead of reinvested. So far, they’ve received nothing.
“A number of us have been waiting months for payout. That has not happened,” Buck told the court.
David LeClaire said Martel has been online as recently as a few weeks ago, “assuring us things are OK” while continuing to solicit money.
‘Everyone’s going to get paid’
Videos of Martel posted online appear to show him trying to reassure investors who want their money out.
“I know I’ve promised you guys multiple dates … Everyone’s going to get paid,” he said in one video.
In an affidavit, William Belland of Nanaimo said he was convinced by MMAC CEO Julie Lyons to invest over $318,000 on March 9, 2023, for a term of less than three weeks. Belland said Lyons did not inform him the company was already defaulting on earlier investors.
“I am concerned that I have been an unwitting participant in a Ponzi-like investment scheme, and I am very concerned that I will not recover the $318,704.60 invested. The loss of this investment will be very difficult for me,” said Belland.
MMAC and Martel were put into receivership after a lawsuit claiming $17.6 million in losses was filed by an Alberta-numbered company.
According to court documents, Alberta 1548199 Ltd. made 82 loans to MMAC between December 2021 and January 2023, money that was “further loaned out by MMAC to third parties seeking short-term bridge financing on commercial and residential real estate deals throughout British Columbia, California and other U.S. states.”
A list in the claim shows the loans made to MMAC from Alberta 1548199 Ltd. range in size from $43,500 to $3.51 million with interest rates as high as 25 per cent.
Fitzpatrick ordered the assets of MMAC, Martel and two related companies be frozen in and outside of B.C. She also ordered Martel to co-operate with investigators and provide access to records.
CBC tried contacting Martel for comment, but his mailbox was full.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
