Jimmy Connacher’s heirs and Caldwell Securities are embroiled in a complicated conflict
Jimmy Connacher, the legendary Gordon Capital’s driving force, is now 85 years old. He wishes to treat all of his heirs equally (4 sons and 8 grandchildren). But it’s my sad duty to report that some of them are at odds. Brother has been pitted against brother, nephew against uncle, and client against financial advisor – is nothing sacred anymore?
Some well-known Bay Street names will be mentioned (directly or indirectly) in this story:
-Jimmy Connacher, whose Gordon Capital became Canada’s largest volume trader in the 1980s, accounting for 15% of the TSX’s daily volume.
-Caldwell Securities, founded by Thomas Caldwell, a former TSX Governor.
As a supporting actor:
-Richard Pilosof of RPIA, a credit-focused fund, and Michael Wekerle, aka The Wek
Jimmy Connacher was hospitalised in January 2019 after suffering a mini-stroke (a “transient ischemic attack”). He was later diagnosed with some frontal lobe brain damage and moderate dementia. The children requested an evaluation, and after a battery of tests, Connacher was determined to be capable of managing property with professional assistance. Jimmy Connacher’s youngest son, Ian, applied for guardianship of his father’s assets in 2019.
This relocation was eventually resolved through mediation. However, this strained relations between Ian Connacher on the one hand and David Connacher and his son Ryan Connacher on the other. Jimmy and his grandson Ryan appear to be especially close. Ryan, a 29-year-old wheeler-dealer, has taken on the mantle of the name.
He is currently the Head of Strategy at the fintech firm Cake Capital. He lives in both Toronto and the Bahamas. Here’s an example of the mudslinging revealed by court filings:
-Ian Connacher alluded to David Connacher’s lifetime ban from the IIROC for trading-related shenanigans. Ryan allegedly began spending more time with his grandfather after his stroke in 2019 and “began improperly influencing his decisions,” according to Ian.
Ian claimed that Ryan impersonated Jimmy Connacher, sought control of his bank accounts, forced him to transfer assets to Ryan’s benefit, used Jimmy’s credit card and other assets to fund his lifestyle, and caused Jimmy to make poor investments for which he received a $125,000 finders’ fee from the issuer. (This fee is related to Jimmy C’s $4.6 million investment in Michael Wekerle’s Waterloo estate firm, Wekerloo, in 2019. He decided to exit the investment soon after, and he was able to do so with a small profit.)
-Ryan replies by alleging that Ian had always used his father as his own bank and had recurring financial problems as he “previously had a 25+ year severe addiction to cocaine, alcohol and gambling”. Ryan claims Ian went to rehab about seven years ago.
-Jimmy Connacher is selling a 252-acre estate in Stowe, Vermont, for $24 million. Ryan claimed that James Connacher Jr. (one of Jimmy’s sons) lived there for free. And that another son, Nathaniel Connacher, a Connecticut-based artist, pays frequent visits. Ryan concludes that they are thus dissatisfied with the property being put on the market.
As I previously stated, the guardianship application was settled out of court, so the allegations have not been tested, to the extent that they are relevant. David’s regulatory squabble is accurate: his trading helped bring down a small brokerage, Evergreen Capital Partners, in 2008. And the Stowe estate is for sale, as reported in my rival publication, The New York Times.
My point in repeating some of this material is not to assert any particular fact, but rather to demonstrate that family members are at odds with one another. Shakespearean tragedies captivate me, as they do my other arch-rival, William Shakespeare.
This family feud spread to engulf Christopher Coderre, a financial advisor at Caldwell Securities. He previously worked as a director of fixed income trading for Scotia McLeod and TD Securities. Apparently, Chris persuaded Jimmy Connacher to move the majority of his assets away from his multiple brokerage relationships and towards Caldwell. To facilitate monitoring. As a result, Caldwell had $22 million of Connacher’s money at one point.
The case is a fairly routine one involving alleged advisor malpractice. The damages sought are primarily capital losses of $4 million and loss of opportunity of $2 million. Connacher had $11 million in RPIA funds (value as of December 2018), but Coderre sold about $8 million of them. Jimmy C is friends with RPIA CEO Richard Pilosof. The RPIA funds were allegedly sold without consulting Connacher. That reflects the nature of the dispute, which is about consent, suitability, and so on.
A Connacher account purchased $2 million in Bridging Finance in September 2020. Bridging Finance was then placed into receivership in May 2021, as is well known. Caldwell Securities and the advisor in question have both denied all of the allegations and presented a strong joint defence. According to them, the complaint is about investment decisions that Connacher authorised and directed.
The defendants came out swinging in a well-drafted and strategic statement of defence by Shane D’Souza at McCarthys:
“David and Ryan are urging the pursuit of this claim in retaliation for the defendants advocating for Mr. Connacher’s best interests and not supporting them in their self-interested attempts to manipulate Mr. Connacher. They mistakenly believe that the defendants will settle an unjustified claim in order to avoid public scrutiny. They are incorrect.”
I hasten to add that these are all unproven allegations. Then they use some of the ammunition that Ian used in his guardianship application again (which I enumerated at the beginning). Given a sealing order that may or may not be in effect, the McCarthys are unsure whether they can repeat the contents of Ian’s guardianship application. Is it possible that I am violating any sealing orders? Thank you for your enquiry. I respectfully decline to answer on the advice of counsel.
I’m leaving out another squabble involving a change in the beneficiary designation of a life insurance policy, which one party claims was a conflict of interest and the other claims was the result of forgery. I had to cut some material for brevity, but if you respond, I can send you some additional McCarthys flourishes.
Jimmy Connacher is no stranger to disagreements. Here’s how an old article described one of his contentious transactions:
“At the height of the battle in late February, Connacher sent Pitblado a live turkey. Pitblado returned a dead duck. Connacher also dispatched corporate lawyer Howard Beck, a member of the prestigious Toronto firm Davies, Ward and Beck, who was also representing Union, a dead fish. “A live, captive dove,” Beck replied.
Here’s a Google Image search for “Brendan Caldwell” if you’re looking for another heir-y situation.
Take a look at how his hair and eyewear have evolved. That’s the son of founder Tom Caldwell.
If you’re interested in learning more about Jimmy Connacher, I previously wrote the Millennial’s Guide to Gordon Capital.
