Lawyer convicted of fraud in Knowledge House case shuts down practice

Halifax lawyer Blois Colpitts is "voluntarily withdrawing" from practising law on an interim basis, according to a notice posted Monday morning on the website of the Nova Scotia Barristers' Society.

Colpitts was convicted March 9 of two counts of fraud for his role in the Knowledge House stock manipulation scheme. 

Convictions against Colpitts and former Knowledge House president and CEO Dan Potter followed a trial that spanned more than 150 court days over two years in Nova Scotia Supreme Court. 

"In any case in which a court decision is seriously critical of a lawyer's conduct, NSBS reviews these decisions and considers whether any steps are required to protect the public," said Jacqueline Mullenger, the barristers society's acting executive director.

"Consideration of each case is based on the unique public interest factors present."

According to Mullenger, those factors can include:

• How long ago the conduct occurred.
• The nature of the misconduct and whether it involved the lawyer's legal practice or personal conduct.
• Whether there is a history of misconduct and complaints.
• Issues of access to justice.
• The need for procedural fairness as well as public protection.

The barristers' society notice said Colpitts's practice, RBC Law Inc., will be temporarily taken over by lawyer Warren Chernoby, also of RBC Law. The firm did not immediately respond to CBC's request for comment Monday.

'Significant economic loss to numerous investors'

Last month, Justice Kevin Coady found Colpitts and Potter engineered a conspiracy to maintain share prices that spanned 18 months and involved spending more than $11 million to buy 50 per cent of the Knowledge House shares that crossed the Toronto Stock Exchange.

"This conduct not only put the economic interests of existing and potential [Knowledge House] shareholders at risk, but caused significant economic loss to numerous investors, known and unknown, and financial institutions," Coady said in a 207-page written decision.

Knowledge House developed educational software and was once the pride of Nova Scotia's information-technology sector, employing 120 people by the late 1990s. But it all came crashing down in the summer of 2001 when its share prices collapsed. Investors lost millions and dozens were thrown out of work. 

The failure triggered what one judge called an "avalanche" of litigation, regulatory hearings and criminal prosecutions.

Sentencing for Colpitts and Potter is set for May 22.