Canadian film financier Jason Cloth defrauded investors, capital markets tribunal finds — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Jason Cloth and his now-defunct Creative Wealth Media Finance Corp. were found to have perpetrated securities fraud by misappropriating investors' funds, including diverting $53.8 million to real estate developer Conacher Kingston and construction company Olympus Home; the producer holds executive producer credits on 'Joker' and 'House of Gucci.'
- Creative Wealth raised roughly US$7.9 million from investors in a Series E financing round, of which at least $4.19 million went to repaying earlier investors in other projects; the company entered bankruptcy proceedings in October 2023.
- Capital Markets Tribunal found that between October 2018 and the end of 2021, Cloth used money raised for specific media projects to fund other media projects and sometimes raised more than the maximum specified in investment agreements; a hearing on costs and sanctions must be held no later than Nov. 30.
- Ontario Securities Commission argued before the tribunal that from 2018 onward Creative Wealth was sustained 'through Ponzi-like payments,' and the ruling records Cloth's admission that he invested money raised for films in real estate without informing investors.
- U.S. Attorney's Office for the Northern District of Illinois says Cloth was arrested in the United States in July on seven counts of wire fraud, each punishable by up to 20 years in federal prison; he was released on bail and the allegations have not been proven in court.
- Andrew Guaglio, a Fenton Law Barristers lawyer acting as Cloth's counsel, did not cross-examine any witnesses or make substantive submissions, then sought removal as counsel of record citing a breakdown in the solicitor-client relationship, which the tribunal granted; Cloth did not attend the hearing in person.
- Curtis Lindsay, an OSC spokesperson, said the commission was 'pleased with the Tribunal's decision' and that Cloth's actions 'took advantage of investors, and even personal relationships at times of vulnerability.'
Why it matters: For film and TV investors who lent to Creative Wealth, the tribunal's finding quantifies the loss: $53.8 million diverted to real estate, plus at least $4.19 million of Series E money used to repay other investors. A sanctions hearing due by Nov. 30 and a separate, unproven U.S. case on seven wire-fraud counts leave penalties and recoveries open.
Ask SkimNews
