Knowledge House fraud trial postponed

A high-profile fraud trial that was supposed to begin today and centres on the collapse of information technology company Knowledge House Inc. has been postponed, another delay in the long-running court case. 

One of the men charged, former Knowledge House president Dan Potter, asked for the adjournment to care for his wife, who was injured in a traffic accident 10 days ago.

The trail has been adjourned until Nov. 16. 

Knowledge House Inc. shut down 14 years ago. Charges of fraud and conspiracy to commit fraud were laid more than four years ago against Potter, the company's lawyer, Blois Colpitts, and former National Bank stockbroker Bruce Clarke. 

Beginning in 2000, the Nova Scotia publicly traded company saw its penny stock soar to $9. Knowledge House collapsed in August 2001, taking with it about 50 employees, $1.2 million of taxpayers money, and investments by ordinary Nova Scotians. At one point, those investments were valued at close to $100 million.

Since then there has been an avalanche of lawsuits and an investigation by the RCMP that took more than seven years to complete.

In June, the Nova Scotia Court of Appeal made an important ruling. It ordered National Bank to pay $3 million in punitive damages to four investors and $6 million to the estate of a deceased investor. 

The appeal court said it was punishing the bank for dragging out trials when it knew Clarke had admitted to stock market manipulation as early as 2005. The bank and the Nova Scotia Securities Commission agreed to keep that fact secret for seven years.  

When the agreement finally surfaced, the appeal court judges said it showed the bank had been actively deceiving the court and the public, amounting to "an abuse of process."

The bank must also pay legal costs.