The British Columbia Securities Commission’s executive director issued a hearing notice on May 24, 2011 seeking orders against James Dupree, Ian T. Ball, Stephen Armitage, and Peter B. Thompson alleging that they attempted to carry out an advanced fee scheme involving two B.C. shareholders of York-Rio Resources Inc. You can view the notice below.
In 2009 and 2010, the BCSC issued two joint Investor Alerts with the Manitoba Securities Commission warning York-Rio investors about possible recovery room schemes.
If you have any information or questions please contact the BCSC at 604-899-6854, 1-800-373-6393, or e-mail [email protected].
BCSC Executive Director’s Bulletin: Securities regulator issues notice of hearing seeking orders against four individuals for advance fee scheme
Vancouver – The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that four individuals breached securities laws when they proposed to execute trades for British Columbia residents in exchange for payment as part of an advance fee scheme.
The notice of hearing alleges that James Dupree (Dupree), Ian T. Ball (Ball), Stephen Armitage (Armitage) and Peter B. Thompson (Thompson) attempted to carry out an advanced fee scheme involving two B.C. shareholders of York-Rio Resources Inc. The four men claimed to be representatives of Douglas Charles, a purported offshore investment firm with offices in Switzerland and Panama. Orders are also being sought against Douglas Charles.
The notice of hearing also states that the Douglas Charles website consists almost entirely of text plagiarized from websites of other established financial services firms. For example, text was taken from a B.C.-based investment dealer, an investment dealer owned by a Canadian chartered bank, a wealth management firm based in Manitoba, a Japan-based securities dealer, and two broker dealers based in the U.S.
Furthermore, the Panamanian address given on the website as the head office location for Douglas Charles is actually that of a virtual office services company with which Douglas Charles has had a contract since January 2010.
The notice also alleges that:
- In January of 2011, Dupree contacted a British Columbia shareholder of York-Rio Resources and arranged a phone call between the shareholder and Ball, a Senior Vice President of the Wealth Management and Taxation department of Douglas Charles.
- During the phone call, Ball told the shareholder that he represented an investor who was interested in trading York-Rio shares for shares in Apple, Inc. in order to show a loss in his portfolio.
- Under the terms proposed by Ball, the shareholder would need to send $9,000 to Douglas Charles to make up the difference in share price between the York-Rio shares and the Apple shares.
- On January 17, 2011, Ball sent the shareholder an email that included a document summarizing the transaction described above.
- On February 28, 2011, a representative of Douglas Charles contacted a second British Columbia shareholder of York-Rio by phone and made a similar offer. The second shareholder later received documents via email from Thompson, confirming the offer discussed on the phone.
In addition to the allegations concerning the attempted advance fee scheme, the BCSC is also alleging that Dupree, Ball, Armitage and Thompson engaged in trading securities without being registered in British Columbia.
These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on June 14, 2011.
Our video called “What You Pay to Buy and Sell” sets out what your registered investment advisor must tell you before a trade. This includes any fees and other charges that you must pay, whether your advisor’s firm will receive a trailing commission, and if any deferred sales charge apply. The video explains the meaning […]
While you may be inclined to use the professional services of someone recommended to you by a friend or relative, Canadian securities regulators encourage investors to always check registration before investing money with a financial advisor or firm.