Atlantic Acceptance Corporation, Ltd. is an Oakville, Ontario financing company. It collapsed in 1965 in one of Canada's biggest financial scandals at the time, with a $ 65 million loss to investors.
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Atlantic Acceptance is a finance company specializing in commercial, real estate and automotive loans. It started business in 1953 and was eventually led by Campbell Powell Morgan. The control of the company came to be held by Lambert International, led by financier Jean Lambert. The company experienced rapid growth in the early 1960s, with sales increasing from $ 25 million in 1960 to $ 176 million in 1964. It became Canada's sixth largest sales finance company in 1965, with assets of $ 150 million. Through Lambert's connection on Wall Street, the company withdrew loans from major banks, pensions, universities and other investors such as the United States Steel and the Carnegie Pension Fund, Ford Foundation, Princeton University, Pennsylvania University, National Main Company, First National City Bank of New York and Morgan Guaranty Trust Company. Atlantic Acceptance also holds a large stake in Commodore Business Machines, and has three directors on the Commodore board.
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Downfall
The company made a number of high-risk and undocumented loans. This includes a $ 10 million loan to Lucayan Beach Hotel and the Bahamas-connected Casino, which is controlled by Louis Chesler and Wallace Groves, and secured only by stock at the resort. Atlantic Acceptance also issued misleading financial statements, and there was a conflict of interest by Morgan and by outside auditors (Wagman, Fruitman & Lando). The company began to experience liquidity problems. A $ 5 million check issued by the company to redeem some bounced loans on June 14, 1965, and the company was placed on the curator three days later.
Aftermath
The Royal Ontario Commission investigated the collapse, beginning in 1966, chaired by Samuel Hughes QC, with a four-volume report released in 1969. Campbell Powell Morgan died of leukemia in October 1966. Lambert's investment house & amp; The company, owned by Jean Lambert, closed the door. William Pike, the mortgage manager of the British Mortgage and Trust Company, was found guilty of taking bribes and sentenced to two months in jail. Accountants William Walton and Harry Wagman were convicted of theft and conspiracy to cheat in 1967 and were sentenced to two years in prison. Attorney Donald Reid was convicted of bribery and sentenced to one year in prison. The British Mortgage and Trust Company, creditor and investor of Atlantic Acceptance, was rescued by the Ontario government. The intervention was seen as an incentive for the creation of Canada Deposit Insurance Corporation in 1967.
References
Further reading
- Sunday, Irvine Duncan. "The collapse of the Atlantic Receipts Corporation and its Influence on the Structure of Obligations and Quality of Canadian Financial Company Reporting." University of British Columbia. 1968.
- Croft, Roger. "Fraud: A Decade of Canadian Stock Fraud." Gage Pub. 1975. ISBNÃ, 978-0771599347
Source of the article : Wikipedia
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