Earl Jones victims can sue Royal Bank

AQuebec court has authorized a class-action lawsuit against the Royal Bank of Canada launched by victims of convicted fraudster Earl Jones.

Quebec Superior Court Justice Robert Mongeon granted permission Wednesdayfor the$40-millionaction, launched earlier this yearagainst RBC, where Jones conducted most of his business.The formerMontreal financial adviser fell from grace when his Ponzi scheme was revealed last summer.

Appearing at the Montreal courthouse, lawyers for the Royal Bank said they would not challenge a motion filed by the victims' group seeking authorization to sue.

Lawyer Neil Stein, who represents Jones's victims, said the bank'sdecision notto challenge the motionbodes well for victims. "It shows they're at least going to collaborate in some fashion, and hopefully we'll be able to resolve the matter at a point in time."

RBCsays it was also a victim in the scam.

"We were deceived by Earl Jones just as his clients were," said bank spokeswoman Gillian McArdle. "Until 2009, there was nothing to signal that Mr. Jones was anything but a legitimate and a successful businessman."

Jones is currently serving 11 years in jailfor fraudafter he bilkedhis former clients out of an estimated $50 million over a decade.

The class-action suitalleges the Royal Bank's Beaconsfield branch in Montreal's West Island was aware that Jones was exploiting his personal account for his financial dealings, which included depositing cheques with double endorsements and forged signatures.

According to legal documents filed with the lawsuit, Jones enjoyed a privileged status at the bank because of his reputation in the community.

The suit's petitioner is Virginia Nelles, whose brother and mother lost almost $1 million after investing it with Jones.

Several victims lost their life savings and have never reclaimed any of their money. Six victims have lost their homes and 11 more face possible eviction when their mortgage relief runs out in August.