Ontario tribunal rules film financier Jason Cloth committed securities fraud

Ontario’s Capital Markets Tribunal concluded that Toronto film financier Jason Cloth and his now-defunct firm Creative Wealth Media Finance Corp. engaged in securities fraud by misusing investors’ funds. The tribunal said Cloth diverted $53.8 million that had been raised for film and television loans to a real-estate development company and a construction firm, and also used money intended for specific media projects to fund other projects. In at least one financing round, more than half of the capital raised was used to repay earlier investors rather than the stated purpose.

Cloth, who has executive-producer credits on titles such as Joker and House of Gucci, was the sole director and officer of Creative Wealth, which financed productions through loans funded by investors and charged a fee based on the amount invested. The Ontario Securities Commission had argued that the company operated on a “Ponzi-like” basis, relying on new investor money to pay returns to earlier investors.

The tribunal’s decision noted that Cloth acknowledged his actions were improper, stating he understood that “some of the things that went on were not right.” Cloth did not attend the hearing and could not be reached for comment. His counsel withdrew from the case shortly before closing submissions.

The ruling follows Cloth’s July arrest in the United States on seven counts of wire fraud, each carrying a potential sentence of up to 20 years. He was released on bail, and the U.S. charges have not yet been adjudicated. Creative Wealth entered bankruptcy in October 2023.

OSC spokesperson Curtis Lindsay said the commission was “pleased with the Tribunal’s decision in this case in finding Jason Cloth perpetrated fraud,” adding that the commission awaits the tribunal’s decision on sanctions.