The federal ethics watchdog has launched an investigation into allegations that Liberal MP Joe Peschisolido failed to update his public records when the Law Society of B.C. took control of his law firm earlier this year.

Ethics commissioner Mario Dion confirmed in a letter to Conservative MP Peter Kent, who requested the inquiry, that he is looking into the matter.

Federal ethics rules require MPs to report any material changes to their investments and other private interests within 60 days.

The disclosure summary for Peschisolido, the MP for the Vancouver-area riding of Steveston—Richmond East, still lists him as the sole owner of the Peschisolido Law Corporation, even though the Law Society of B.C. appointed a custodian to wind up the real estate law practice in April.

Peschisolido, who also resigned from the bar last year, issued a statement saying he is co-operating with the investigation but cannot comment further.

"I am fully co-operating with the inquiry and have the utmost respect for the office and the process of the ethics commissioner," the statement said, adding that he is currently working on a response to Dion's request for more information.

"I am unable to elaborate at this time as I have been requested by the ethics commissioner to keep this confidential."

Questions around the 'bare trust' deal

Kent based his complaint on reporting by Global News, which published a story about the role the Richmond, B.C., law firm had played in a real estate transaction, called a 'bare trust' deal, involving an investment in a condo development by an alleged kingpin in a Chinese drug cartel.

Such deals are legal, but have come under scrutiny as B.C. grapples with a money laundering scandal blamed for skyrocketing real estate prices.

The Conservatives and the NDP both asked questions about money laundering in the House of Commons when the story broke in June, but the investigation by Dion is focused on whether he fulfilled his obligation to report the change of ownership on time.

Peschisolido, who was first elected as a Canadian Alliance MP in 2000, crossed the floor to join the Liberals two years later. He is seeking re-election this fall.