BOB LINDQUIST FORENSIC LESSONS LEARNED #3

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For young professionals: Work hard because you never know who might take an interest in your career.

The case is presented in more detail at

                             lindquistforensics.com

‘Selected Cases’          ‘1970s’            ‘The Collapse of Atlantic Acceptance Corporation’

Lindquist starts his 41st year and recalls his move into Forensic Accounting

It was January 1972, and the audit season was in play at Touche Ross Bailey & Smart (now Deloitte Touche) in Toronto when the audit partner called me into his office.  He was not pleased with me.  I had just won the 1971 Rally Championship in a Datsun (now Nissan) and his statement to me was to decide whether I wanted to drive rally cars or be a professional auditor. This meeting followed several evenings and weekends working on one of his audits. I vividly remember this meeting, as if it was yesterday, I kept my cool. 

It was a wonderful opportunity because earlier Brian McLaughin who was in charge of the insolvency group had told me that if the day arrived when an audit partner didn’t like me, to come see him.   I did, in the first week of February 1972 and at the time I had no idea that forensic accounting would become my career.

Brian had previously been retained to assist Commission Counsel for the Honorable S.H.S Hughes with the public inquiry into the collapse of a major finance company.  My first assignment was to proofread the draft report entitled ‘Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited’. 

By way of background, in June 1965 ‘Atlantic’, a major Canadian finance company with Powell Morgan as President failed to meet a $5 million matured secured note and three days later it was placed into receivership.  Its collapse shook Canada’s financial community and a $20 stock became .65 cents. 

I found the findings to be most fascinating.  Subjects in the report like “The Five Wheels Transaction and its Reversal” made references to names such as Commodore Business Machines, Allen Manus a Toronto stock promoter, Jack Tramiel and the Grand Lucayan Beach Hotel in the Bahamas.  In one day, one amount of $750,000 was processed through six transactions called “A Financial Merry-Go-Round.”  The Report stated the collapse represented a loss of some $70 million and labeled Morgan as inventive, ingenious, incompetent, corrupt and a swindler.  This sure beat auditing!!

The intrigue captured my interest and my passion; I had been rescued from the audit world and the rest is history, thankfully still unfolding over 40 years later. 

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