Knowledge House accused pleads guilty in fraud case
Bruce Elliott Clarke was former stockbroker with National Bank Financial
One of three men on trial for being a co-conspirator in a stock market fraud — that involved as much as $100 million before Knowledge House Inc. collapsed — has changed his plea.
Bruce Elliott Clarke pleaded guilty in a Halifax courtroom last week to being part of a conspiracy to defraud the public market and to defrauding a trust fund set up by the Union Brotherhood of Carpenters and Joiners of more than $5,000.
The 71-year-old Clarke was a former stockbroker employed by National Bank Financial who had pleaded not guilty to six Criminal Code charges.
Knowledge House — a homegrown, e-learning company — folded 14 years ago amid a swirl of allegations, more than 50 employees laid off and dozens of Nova Scotians who saw their life savings evaporate.
As a result of the two guilty pleas, Clarke's lawyers anticipate the Crown will enter no evidence on four other fraud charges — including three involving fraud over $5,000, which the court will likely dismiss.
A date for Clarke's sentencing hearing has not yet been set. It's expected sometime next year.
Meanwhile, the trial for Knowledge House insiders Dan Potter and Blois Colpitts — the company president and lawyer, respectively — continues on charges of conspiracy to commit fraud on the public market as well as committing fraud over $5,000.
Plea change due to 'careful legal research'
For the last two and a half years, Clarke has been represented by Barry Whynot from Nova Scotia Legal Aid. Joshua Nodelman, also from Nova Scotia Legal Aid, was added to the case this past year.
Nodelman said Clarke's decision to change his plea is partly due to "careful legal research and trial preparation" as well as weariness from "living with something for almost 15 years."
The behaviour of the stockbroker and his employer, National Bank, were previously the focus of a seven-and-a-half-year lawsuit prior to this criminal trial.
In May, a Nova Scotia Court of Appeal decision found the bank and the Nova Scotia Securities Commission — which brokered a secret deal to keep Clarke and the brokerage's activities under wraps — at fault.
As a result of that settlement deal, Clarke was ordered to pay a penalty of $25,000 and $10,000 in legal costs. It was his second disciplinary reprimand.
It's unknown whether Clarke will testify at the ongoing trial of the two co-accused.