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State/Country relating to question: Canada
What if there is a situation where a person took out a loan under the advice of a "Financial Advisor" (representative or agent) of a financial institution. And the financial institution on behalf of the loanee gave the money to invest via a 3rd party whom which the financial institution has a "distribument agreement" with. The loanee never directly received the money themselves. Later on it is found that 3rd party was inappropiately using the money in a ponzi scheme and the Financial Institution which loaned the money to the 3rd party failed to properly audit the the 3rd party (via documents found). Is the Financial institution liable for negligence. Does the "Baldwin V. Daubney" and "Isaacs v. Royal Bank of Canada" have any effect whether the financial institution (creditor) is liable for negligence?
The loan from the financial institution which was sent to the 3rd party was to be used in a rrsp type investment. The financial advisor who suggested the loan to the client. Filled out the loan application for the client and submitted the application under the guise of being a agent for the financial institution. The financial institution denies that the advisor was a legitimate agent. But they processed the loan anyways. The financial institution has been doing this lending program for over 2 years with the 3rd party without auditing where the money was going. Nearly 27 million dollars was invested' into this program before it was halted by the OSC. But the people who took out the loans s are still the hook with the Financial company to pay it back.
State/Country relating to question: Canada
What if there is a situation where a person took out a loan under the advice of a "Financial Advisor" (representative or agent) of a financial institution. And the financial institution on behalf of the loanee gave the money to invest via a 3rd party whom which the financial institution has a "distribument agreement" with. The loanee never directly received the money themselves. Later on it is found that 3rd party was inappropiately using the money in a ponzi scheme and the Financial Institution which loaned the money to the 3rd party failed to properly audit the the 3rd party (via documents found). Is the Financial institution liable for negligence. Does the "Baldwin V. Daubney" and "Isaacs v. Royal Bank of Canada" have any effect whether the financial institution (creditor) is liable for negligence?
The loan from the financial institution which was sent to the 3rd party was to be used in a rrsp type investment. The financial advisor who suggested the loan to the client. Filled out the loan application for the client and submitted the application under the guise of being a agent for the financial institution. The financial institution denies that the advisor was a legitimate agent. But they processed the loan anyways. The financial institution has been doing this lending program for over 2 years with the 3rd party without auditing where the money was going. Nearly 27 million dollars was invested' into this program before it was halted by the OSC. But the people who took out the loans s are still the hook with the Financial company to pay it back.
