Admitted Discipline Violations

Summary of Decision of the Hearing Panel

Rene Henri Daignault

Vancouver, BC

Called to the bar: November 19, 1993

Hearing date: March 12, 2020

Panel: Kenneth Walker, QC (Chair), Monique Pongracic-Speier, QC and Guangbin Yan

Decision issued: April 17, 2020 (2020 LSBC 18)

Counsel: Jaia Rai for the Law Society; William MacLeod, QC for Rene Henri Daignault


Rene Henri Daignault has practised as a sole practitioner through his law corporation since 2002, and his areas of practice include securities law. His law corporation maintains trust accounts, one in US dollars and one in Canadian dollars. From approximately 2002 to 2013, he represented a corporation and took instructions from its principal.

In 2011, Daignault received an email from someone overseas confirming that $40,000 US was on its way to his trust account for the purchase of shares in an over-the-counter trading company connected to the principal of the corporation he was representing. The person who sent the email described himself as the managing partner of an asset management firm in Switzerland. The instructions said that funds for the purchase would come from one entity but the shares should be registered in the name of another entity. The names of the funder and the registered purchaser were given in the email. Daignault did not know either the funder or the purchaser and did not make inquiries about them. He did not know the identity of the vendor of shares and did not inquire. He did not inquire about the source of the funds.

The funds were wired into Daignault’s trust account, and the transfer documentation indicated that the funder was an “overseas management company” in the British Virgin Islands. Based on verbal advice from his client — the principal of the corporation he was representing — he treated the funds as his client’s funds. In his correspondence with the person who emailed him, Daignault did not caution him that the funds transferred would be considered as his client’s funds and that he would take instructions only from the client regarding the disbursement of funds.

The principal of the corporation gave Daignault instructions to disburse the funds. He paid $20,000 US out of trust to one company as a loan and issued a cheque for $20,000 to his general account, which was then wired to a California bank to the credit of another company as a loan. Daignault drafted convertible promissory notes in relation to the loans. When he disbursed the funds, he did not know the share purchase transaction had not completed.


Daignault corresponded with the person who sent him emails from overseas over a period of many months about the incomplete share transaction. Daignault said he did not receive any funds. He never returned the funds to the person who sent the email instructions, the funder or the purchaser. No civil action was taken against him in relation to the transaction.

The person Daignault was corresponding with was arrested in Manitoba and charged with money laundering. The BC Securities Commission found him guilty of conduct contrary to the public interest for his part in an illicit stock promotion and suspended him from participating in trading activities for five years. He also complained about Daignault to the Law Society, which opened an investigation. In the course of its investigation, the Law Society examined two other concerning trust account transactions.

In the first of the two transactions, Daignault received $40,828.70 into his trust account by wire transfer from a Panamanian company, which transmitted the funds on behalf of the company’s client. The principal of the corporation he was representing gave written instructions to pay $40,000 to a bank in Santa Monica, California as loan proceeds for a convertible note. Daignault completed the wire transfer. He did not know the identity of the payer, the relationship between the Panamanian company and the payer, or the identity of the parties to the share transaction. He did not know the details, terms and conditions of the transaction. He did not request, obtain or prepare any written documentation for the transaction.

The share transaction did not complete. The payer sent an email to Daignault noting that they had not received a purchase and sale agreement and the shares. Daignault did not respond. The payer sent further emails requesting a refund. Daignault forwarded these emails to the principal of the corporation he was representing, who replied he would work on it. The funds Daignault held in trust to the client’s credit were not sufficient to repay the funds.

A business associate of the principal wired $100,000 into the trust account and gave Daignault written authorization to take instructions from the principal. Under the principal’s instructions, Daignault refunded the money by paying $40,828.70 in trust to a law firm indicated by the payer.

In the other transaction the Law Society investigated, a company paid $33,760.50 into Daignault’s trust account. He did not communicate with the company and permitted his trust account to be used to receive and disburse funds based on instructions from the principal of the corporation he was representing. He credited the funds to his client and was informed the funds were payment for consulting services. Daignault did not provide any legal services in connection with the receipt or disbursement of the funds. He disbursed the funds in four transactions: $3,000 as a loan to a corporate entity, $22,000 as a loan to the principal, $8,000 as a loan to cover an invoice for audit fees for a company related to the principal, and as payment of an invoice Daignault himself issued. He did not advise the depositor of the funds that he was not protecting their interests.


Daignault admitted he committed professional misconduct in each of the transactions. He admitted he did not caution any of those involved in the transactions that he was not protecting the interests of those who were not his clients, and he failed to provide any substantive legal services in connection with these transactions.

The panel accepted his admission and found that his conduct constituted professional misconduct.


Daignault and Law Society counsel jointly submitted that the disciplinary action should be a two-week suspension.

The panel considered the repetitive nature of Daignault’s misconduct and his lack of disciplinary history, and found that inattention, rather than intention, was at the root of his actions. The panel agreed with the proposed sanction and ordered that Daignault be suspended for two weeks.

2020 LSBC 18 Decision of the Hearing Panel