Former broker jailed 7½ years

"There was no remorse,'' she added. “The man has no conscience. He still doesn't think he did anything wrong.”

The Toronto Star
March 13, 2001

Former broker jailed 7½ years
Holoday also ordered to repay $6.1 million
Tony Van Alphen

Former Bay Street hot shot Michael Holoday, who insisted his only guilt was “being too generous” and “stupid,” is off to prison to start serving a 71/2-year sentence for swindling clients out of millions of dollars.

Madam Justice Patricia German yesterday slapped the prison term and a $6.1 million restitution order on the unremorseful Holoday for what police described as one of the biggest frauds involving an individual broker in Canadian history.

“He is a dangerous man,” German said as about a dozen former clients sat behind a grim-faced Holoday in a University Ave. courtroom.

German, of the Superior Court of Justice, said Holoday is dangerous, not in a violent sense, but in his ability to charm people, make them trust him and then act “unscrupulously.”

She said the prison sentence and compensation order must serve as a deterrent against white-collar crime and maintain public confidence in investment markets.

German said many clients suffered because of Holoday's criminal conduct, and they no longer have confidence in stock markets because of his breach of trust.

“That is a real tragedy,” she said.

Last month, German convicted 36-year-old Holoday of 14 counts of defrauding more than two dozen clients at two leading Bay Street brokerages between 1992 and 1994.

Prosecutor Greg Tweney requested a 10-year prison term as appropriate in view of Holoday's actions.

He argued such a sentence would also be in the range of what other notorious white-collar criminals have received, including Len Gaudet, Leonard Rosenberg, Bill Player, Julius Melnitzer, Christopher Horne and Einar Bellfield.

Holoday, who can no longer trade because of a lifetime trading ban imposed by the Investment Dealers Association, will be eligible for parole after serving one-third of his sentence.

However, police recently charged him again for allegedly defrauding a bank of $25,000 through bounced cheques in 1997 and 1998.

Evidence at Holoday's 41-day trial revealed he traded clients' money without permission, sent misleading statements to them, covered up their losses with his own cheques, borrowed from them to pay other creditors, committed forgery and lied extensively to protect himself.

Victims included his mother-in-law, brother-in-law, the father of the best man at his wedding, the president of a brokerage holding company, a television producer, a retired couple and an elderly woman who wanted to leave her estate to a Jesuit order.

Dressed in a gray suit and white shirt, Holoday insisted to German before she passed sentence that he was innocent and “there was no intention on my part to defraud.”

A pre-sentence report to the court quoted Holoday as saying a lot of clients were dishonest and lied.

“I'm guilty of being too generous and I'm guilty of being stupid … of covering other people's investment monies with my own money,” the report quoted him as saying.

“I think I am basically a good human being and a benefit to society, not just business, but what I can contribute to the community.”

Holoday, who is now bankrupt, also claimed in the report that most clients profited and he was the largest loser. Trading records showed he lost more than $2 million in personal trading in May, 1994.

Holoday's counsel, Frank Marrocco, requested a prison term in the seven-year range and said his client “is something less than the worst” of the criminals the crown cited in its submissions for a stiff sentence.

The pre-sentence report added that Holoday's adoptive mother thought her son “doesn't know where reality begins or ends.” Furthermore, she suggested he gained his “compulsive lying” from his sister.

The report said Holoday's wife Maureen, who sobbed in court, indicated money was “a big high” for her husband, but he no longer places as much emphasis on material things.

She said in the report her husband is “delusional” and thinks that, if he fights hard enough, problems will be fixed, according to the report.

Toronto police Detective Sergeant Gary Logan, who led the investigation, described Holoday in the report as a cold, calculating and callous individual and that everybody was fair game to him. Mr. Holoday has destroyed marriages, taken people's life savings and has literally destroyed families,'' he said in the report.

German said it was clear Holoday, the adopted son of a B.C. accountant, wanted to make money - quickly - when he became a broker in 1989 at Midland Walwyn Inc. and later at First Marathon Securities Ltd. as a managing partner, futures division.

But evidence at the trial showed Holoday lied at every turn to conceal mounting losses. He traded extensively in commodities to earn multi-million-dollar commissions to fuel his lavish lifestyle, hide the losses of clients and stay in business.

Testimony revealed he collected even more cash by persuading clients to pump millions of dollars into investments that didn't exist.

Holoday resigned from First Marathon in October, 1994, and police charged him in June, 1997. Numerous clients sued him in civil court but eventually settled before the cases reached trial.

Prosecutors calculated that Holoday's clients lost at least $12.8 million in trading and other dealings but Tweney said more than $23 million of their money was at risk.

German's restitution order calls for repayment to 11 clients, including $5 million to the Elaine Roberts family, which controls Fahnestock Viner Holdings and a New York brokerage.

Outside the court, former client Helen Rentis, who was also named in the restitution order, expressed disappointment that Holoday did not receive a longer prison term.

“There was no remorse,” she added. “The man has no conscience. He still doesn't think he did anything wrong.”

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