Benoît Laliberté

Benoit Laliberté

circa 2000
Born ( 1972-07-18) July 18, 1972
Mont-Saint-Hilaire, Quebec, Canada
Nationality Canadian
Occupation President and CEO
Net worth $340 million in 2000
Website www.teliphone.com

Benoît Laliberté (born July 18, 1972) is a Canadian entrepreneur. He is the founder of JITEC, téliPhone Corp., New York Telecom Exchange Inc., and is currently President and CEO of Investel Capital Corp. Laliberté gained some notoriety in Quebec with JITEC, a public company which at its peak in 2000 was worth $CDN575 million, which lost a significant amount of its value in a matter of weeks under allegations of inappropriate transactions. It was also one of the first cases dealt with by the newly formed Autorité des marchés financiers (AMF), formed by the Government of Quebec to consolidate five provincial regulatory agencies.

Early years

Benoît Laliberté was born in Mont-Saint-Hilaire, Québec, Canada. He started his own business called JITEC in 1986 at the age of fourteen, building computer systems in his basement for friends and family. He dropped out of high school to work full-time on JITEC. After working at JITEC for several years as sole proprietorship, he incorporated the company in 1992 and began to sell computers, software and related components in Canada.

The Growth of JITEC

In 1994, JITEC created the first electronic virus immune computer using its Electronic Virus Activity Control (EVAC) technology. EVAC was built into computer servers to immediately detect and prevent viruses. By 1996, JITEC had CDN$7 million in annual sales and 45 employees. This led to him winning the Young Entrepreneur of the Year award by the Business Development Bank of Canada (BDC).

In 1997, Laliberté created Windows Based Intelligent Terminals (WINBIT) and POWERVEC servers. He worked with Microsoft to develop the first generation of cloud computing services. In July 2000, JITEC was listed on the Montreal Stock Exchange after a successful IPO. At this point, Laliberté’s personal net worth was in excess of $345 million.

Controversy

JITEC was growing rapidly; its stock had jumped from CDN$3.80 in late July 2000 to CDN$11.65 in only a few weeks. This sudden success caught the attention of many, including multi-millionaire Herbert Black, who then became a friend and advisor to Laliberté. However, unbeknownst to Laliberté, Black had a well established history of profiting from the short selling of companies’ stocks. Soon after becoming involved with Laliberté, Black allegedly began this process with JITEC. He reported Laliberté to the Quebec Security Commission (QSC) and accused him of insider trading and irregular transactions. He put immense pressure on the QSC to have a cease trade order issued against JITEC, which triggered an investigation. Meanwhile, JITEC stock was falling rapidly based on leaked information to the media. On Nov 10th, 2000, Paul Trudeau, principal investigator for the QSC in the case signed an affidavit required for the QSC to issue a personal cease trade order on Laliberté and an investigation was initiated. This resulted in his forced resignation as CEO the following day, the same day that Black had initiated a class action suit against JITEC, CIBC, Canaccord, and Laliberté himself for losses incurred with the drop in share price. However, at the same time Black was shorting the stock at $10 thereby benefitting from the stock's drop. In 2011, after conducting an extensive investigation, the CIBC filed as part of its defence, that Black himself alone was responsible for the drop in share price.

Benoit Laliberte on first day of JITEC trading.
July 2000: Benoit Laliberté at The Montreal Stock Exchange on JITEC's first day of trading.

A small article in the Journal de Montréal in 2002 reported that Paul Trudeau, the QSC investigator, was reinstated after being arrested and subsequently fired for receiving a bribe of $1,000 from Herbert Black in 2000. Black, who had not disclosed to Trudeau the personal interests he had in the fall of the stock price, was revealed to have shorted the stock of JITEC through insider trading with privileged information. He had apparently manipulated the Commission des Valeurs Mobilières du Québec (CVMQ- now the Authorité des Marchés Financiers, AMF) in hopes of profiting from the downfall of the JITEC stock: he was short selling stocks while informing other investors of alleged irregularities in order to decrease its price (Black had been previously linked to a Commodity Futures Trading Commission lawyer and investigator, Dennis O'Keefe who was disbarred in 2005 based on conflict of interest charges from his 1995 investigation of Sumitomo Corp. for copper price fixing which resulted in a $150 million settlement in 1998). Black denied these allegations. When this was brought to the attention of Laliberté, he immediately filed a lawsuit against the QSC for a record-breaking $127 million in November 2003 on the basis that the QSC was complicent with Black in the demise of JITEC . It was later revealed that Laurent Lemieux, another senior QSC investigator involved in the JITEC case had leaked information on the investigation to the press and was also fired. In what some have viewed as retaliatory, subsequent to Laliberte launching the lawsuit the QSC initiated actions on securities infractions.

In October 2004, Laliberté was assessed by the Ministry of Revenue of Quebec for over $25 million in taxes which is still under appeal. After that, he was charged with a total of 48 counts related to securities infractions with a possible fine of $1.8 million. In February 2008, he was found guilty in Quebec Superior Court on 41 of the 48 counts and given a fine of $900 thousand. 33 of these were for late filing offenses. Laliberté appealed the fines and the trial is currently being reviewed by the Supreme Court of Canada because of the ambiguous nature of the wording of the law. In 2009 Laliberté dropped his suit against the QSC.

The entire affair has been widely reported in Canadian media. On September 23 2013, the Montreal newspaper fr:La Presse (Montréal)"La Presse" published an article on Laliberte, which chronicled his business life since 2000.

Other Projects

After the termination of his company, Laliberté worked to regain what he had lost. He began various projects in an attempt to redeem himself in the eyes of the business world, the most successful being VECTORIA Inc., a portfolio of companies involved in software, information technology and telecommunications. He later founded United American Corporation and Teliphone Inc. and developed the concept behind the New York Telecom Exchange.

TéliPhone Corp.

TéliPhone Corp., founded in August 2004, is an Internet-based digital telecommunications company specializing in hosted business telephony systems that reduce customer capital equipment costs while offering global incoming and outgoing call services. With its own technology, it has developed its International IP-based telecommunications network.

The New York Telecom Exchange

In October 2008, Laliberté created the New York Telecom Exchange Inc. (NYTEX) which was based on the principles of a traditional commodity exchange. NYTEX was incorporated in the State of New York and Laliberte became its Chief Technology Officer. He commoditized international termination, creating a reference quality for each market. This allowed telecommunications to be traded like oil or any other commodity with multiple and anonymous buyers and sellers on a neutral electronic platform.

TéliPhone Navigata-Westel

In December 2012, téliPhone Corp. acquired Vancouver-based Navigata Communications 2009, Inc., a major provider of voice and data services with most of its operations in Western Canada. Now téliPhone Navigata-Westel, it is one of the largest independent facilities-based Competitive Local Exchange Carriers (CLEC) in Canada. It provides services such as voice, data, Internet broadband, IT support, Cloud computing, and IPTV to carriers, business, government, and residential clients.

In August 2014, following the successful restructuring of TNW, he announced that he was leaving the company to pursue other projects.

References

    External links

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