Banking mogul suing government after intelligence leaks leave him shut out of Canadian economy

CTV National News: Banking mogul launches lawsuit A $300-million lawsuit was launched against the Canadian government by the founder of Wealth One Bank. Judy Trinh has the details.

Chinese Canadian banking mogul Shenglin Xian has launched a $300 million lawsuit against the federal government. It’s a means to find the source of intelligence leaks which Xian says has cost him his livelihood.

Xian, the founder of Wealth One Bank, alleges in his statement of claim that the federal government was negligent in failing to prevent the “unauthorized and unlawful disclosure of secret and confidential information” that resulted in “unsubstantiated claims” about foreign interference and money laundering published about Wealth One in media reports.

“My client Shenglin Xian was a victim of mass dissemination of false information that went into the public record,” said Toronto lawyer Joel Etienne.

“What we're trying to do is get to the truth. What we want is transparency and what we want is full vindication.

The statement of claim filed in Ontario Superior Court on May 8 names the Attorney General of Canada, the Director of the Canadian Security Intelligence Service, the RCMP Commissioner, and the Globe and Mail. An ex-Mountie and former CSIS director who work together at the consultancy firm Critical Risk Team are also named in the suit. CTV News has quoted experts from the firm in previous stories on foreign interference not related to Wealth One Bank.

Banished from the economy

The lawsuit also alleges that CSIS was fully aware that “human sources can be mired by racial, xenophobic and ethnic biases” yet the public assumes information from CSIS is “reliable” which makes the leaks particularly damaging.

The claim states that Xian has been “effectively banished from the Canadian economy.” The 69-year-old has been forced to divest from the bank he built. Wealth One Bank, which caters to newcomers, has been forced to lay off staff after losing customers, and Xian says he can’t even get a bank card.

It’s a huge fall off the corporate ladder for Xian who was once lauded by politicians at all levels as an immigrant success story. He became a Canadian Citizen in 1993 and moved from selling bicycles to selling insurance before parlaying his connections into starting Wealth One Bank.

'Partisan' and 'Reckless' disclosure

CTV News asked experts in national security and constitutional law to review Xian’s claim and provide insight.

Artur Wilczynski is a national security expert who oversaw the signals intelligence unit at the Communications Security Establishment before he retired in 2020. To Wilczynski, Xian’s massive lawsuit reveals deep frustration that the source of the intelligence leaks hasn’t been found.

”Intelligence is a particular type of information collected in a certain way using certain tradecraft and certain sources that doesn’t necessarily meet other kinds of information like journalism or diplomacy. That’s why we have to be careful how we use it, because sometimes we get it wrong,” Wilcynski said.

”Intelligence organizations have a lower standard to report internally, that’s why it’s important to protect that information.”

Wilcynski also sees a partisan pattern in the leaks about the Wealth One case and in examples that have been examined at the public inquiry which focused on Beijing’s meddling in the past two elections.

Xian’s lawsuit states that the “reckless disclosure” of secret information was designed to create false allegations in public that would influence the Minister of Finance's decision to order Xian to divest his shares in the bank.

In the spring of 2023, Finance Minister Chrystia Freeland amended the letters of patent. The order directed the bank to sever its relationships with Xian and two other primary shareholders.

”There seems to be an intent behind the leaks to embarrass the particular current government,” Wilcynski said.

A 'hot mess'

Constitutional lawyer Julian Falconer doesn’t see partisanship in the leaks. Instead, he sees a “hot mess” revealed in a lawsuit that will further harm Canada’s reputation.

Classified information about Wealth One and its founder has been slowly leaking for more than a year.

”I see this as a black eye for Canada and its intelligence service,” says Falconer, whose practice focuses on state accountability.

Xian's allegations, coming on the heels of the conviction of former senior RCMP intelligence official Cameron Ortis, reveal to Falconer that there are systemic issues within Canada’s security apparatus.

"I see absolute incompetence in maintaining information pertinent to national security. These are not one-offs. There are obvious serious leadership issues within our intelligence services.”

Falconer points out the dollar amount of the lawsuit may draw attention, but the real impact of the case lies in what Xian’s legal team can access through meticulous arguments for discovery. They will try to get documentation and evidence to bolster their case that the government of Canada may not want to disclose.

”Even classified information can be turned over with strict rules attached to them if there are merits to the allegations regarding abuse of public office. Lawsuits like this can expose more information that CSIS wants to keep under wraps.”

No charges laid

Although the lawsuit was filed more than a week ago, the Attorney General of Canada has yet to be served with the statement of claim and therefore hasn’t determined its next step.

As for CSIS, spokesperson Eric Balsam says it would be inappropriate for the spy agency to comment on a matter before the courts

Balsam says the agency “continues to investigate the unauthorized disclosure ("leaks") of classified CSIS information to the media, in parallel and in coordination with other Government organizations as well as the RCMP criminal investigations.”

CSIS says it takes allegations of security breaches and unauthorized disclosure of classified information “very seriously.”

The investigation into the leaks began more than year ago. No charges have been laid.