John Sheehan SC has recommended Mr Macdonald face fraud charges.
The charges carry a maximum penalty of eight years in prison and $350,000 in fines.
The company could also face fines of $1.75 million.
The charges would be based on a February 2001 press release in which the company claimed the adequacy of its compensation fund was based on expert advice from accountancy firms.
The documents say that advice did not relate to the adequacy of the funds and therefore the press release misled the public and the stock exchange.
By In Solidarity 12 August 04
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