Victoria radio host defrauds hundreds of clients out of $65 million

Between 2007 and 2010, David Michael Michaels fraudulently advised just under 500 clients, many of them seniors, according to a ruling from the B.C. Securities Commission

The host of “Creating Wealth with David Michaels” on CFAX 1070, Michaels reached around 20,000 listeners a week, drawing in prospective clients to seminars, and eventually his unregistered investment practice, advising them to sell their bonds and stocks while borrowing against their homes—in order to purchase high-risk securities—according to a B.C. Securities Commission (BCSC) panel.

In total, Michaels made $5.8 million in fees from selling $65 million in exempt securities, high-risk investments with fewer oversights than listed stocks. The BCSC estimates that he lost $40 million of his clients’ money, and that the rest remains at risk.
At the height of the financial crisis, Michaels, a former mutual fund adviser, told listeners that, following the bailouts of GM and Chrysler, pension plans were unsafe and that through his services he could “show people how to secure their portfolios against the coming depression.”
At times Michaels resorted to global instability to unsettle listeners with portfolios in mutual funds and stocks, according to the panel. When asked if the 2008-2009 Gaza War could have “major financial ramifications,” Michaels responded: “I’m just afraid to say this, could it be the beginning, could it be the beginning, of World War III?”