Free Rider: How a Bay Street Whiz Kid Stole and Spent $20 Million

Jane M. Wilson is a Toronto-based chartered financial analyst in the
investment business.

“Free riding” is the term for trading same-day settlement
instruments with no money in one’s account. This peccadillo was the
least of Michael Holoday’s actions. During a seven-year career at
Midland Walwyn and First Marathon, this broker managed to lose or
appropriate the large and small fortunes of many people.

During the 1990s, Holoday’s success in trading futures attracted
clients, but as the market went against him, he began robbing Peter to
pay Paul. With astonishing ease, he cajoled, lied, and otherwise
inveigled clients to part with their money. As his Ponzi scheme
burgeoned, he simultaneously kited $5-million cheques weekly to his
richest client, fielded a stream of irate calls from customers, dashed
from one to the other with cheques, and still lived a lavish life.

Holoday’s personality is chilling. A pathological liar, he callously
exploited more trusting family members and friends and seemed to have no
remorse about the lives he ruined. Somehow he persuaded seemingly
intelligent people to sign account applications in blank, to ignore
monthly statements, to rely on his handwritten accounts, and to give
cheques payable to him even as his schemes sounded still more
farfetched. The credulity of his employers (as well as the lack of
assistance offered to complaining customers) is equally disconcerting.
Given that legal proceedings lasted as long as Holoday’s spree, there
was little or no justice.

John Reynolds’s fascinating story of peculation and detective
investigation does not imbue one with great confidence in stockbrokers.
Although, as the author says, “Things may be changing” in the
regulation of firms and their employees, Free Rider is still essential
reading for anyone opening a brokerage account.