Every month we release an Enforcement Roundup. We cover British Columbia Securities Commission (BCSC) regulatory cases and report on other self-regulatory organizations’ decisions when pertinent. From time-to-time, we also cover criminal cases related to our decisions or investigations.
This Enforcement Roundup contains three BCSC enforcement decisions and one notice of hearing. The roundup also contains two Investment Industry Regulatory Organization of Canada (IIROC) decisions and two Mutual Fund Dealers Association of Canada (MFDA) decisions.
BCSC Liability Decision – Thomas Arthur Williams, Global Wealth Creation Opportunities Inc., Global Wealth Creation Opportunities Inc. (Belize), Global Wealth Financial Inc., Global Wealth Creation Strategies Inc., CDN Global Wealth Creation Club RW-TW, and 2002 Concepts Inc., Thomas Arthur Williams, Susan Grace Nemeth, Renee Michelle Penko, Paul Finney, Irene G. Beilstein, Christina Kiemel, Dennis Carl Weigel, and Eric Clark
A BCSC panel found that Williams and his Global Group of Companies committed fraud by raising approximately $11.7 million from 123 investors.
The panel also found that Williams, certain Global Group Companies and several of the individuals Williams used to introduce investors to the Global Group of Companies, breached BC securities laws. Those found to have committed misconduct are Susan Grace Nemeth, Renee Michelle Penko, Irene G. Beilstein, and Dennis Carl Weigel.
The panel dismissed similar allegations against Paul Finney, Christina Kiemel, and Eric Clark, all of whom reside outside of BC.
The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.
A BCSC panel ordered Snider to pay a fine of $7,500 and be prohibited from BC’s capital markets for a period of four years for illegally distributing securities.
In October 2015, the panel found that Snider, a Kelowna resident during the relevant period, assisted in the sale of promissory notes in Flag Resources (1985) Limited to four BC residents for proceeds of $21,000.
A BCSC panel has sanctioned HRG, Downie, and Mohan for illegally distributing securities. Downie was a director and founder of HRG, and Mohan was a director and chief executive officer of HRG. Neither has been registered to sell securities in BC.
The panel ordered that Mohan pay to the BCSC the $103,530 he received in commissions for his role in HRG’s capital raising efforts, as well as an administrative penalty of $75,000. Downie was ordered to pay an administrative penalty of $75,000. Mohan and Downie were banned from participating in BC’s capital markets for a period of seven years.
The panel also ordered that HRG be permanently cease-traded.
An IIROC hearing panel accepted a settlement agreement with sanctions, in the matter of Gary Clarke. Clarke admitted that he made unsuitable recommendations for two client accounts and placed discretionary trades on behalf of one client account.
Clarke agreed to a two-month suspension from registration in any capacity, pay a $30,000 fine, successfully rewrite the exam based on the Conduct and Practices Handbook, pay costs in the amount of $2,500, and a requirement that any future registration be subject to a six-month period of close supervision.
In the settlement agreement, Li admitted that he made discretionary transactions in client accounts.
Li agreed to a one-year suspension from registration in any capacity, payment of a $40,000 fine, successfully rewrite the exam based on the Conduct and Practices Handbook, pay costs in the amount of $2,500, and a requirement that any future registration be subject to a one-year period of strict supervision.
In the settlement agreement, Pang admitted that on March 14, 2014, he falsified a client’s signature on an account form containing KYC information, contrary to various MFDA rules.
Pang paid a fine in the amount of $4,000 and costs in the amount of $2,500.
In the settlement agreement, Harris admitted that from March 2010 to April 2014, he obtained, maintained and/or used 56 pre-signed account forms in respect of 34 clients, contrary to an MFDA rule.
Harris paid a fine in the amount of $10,000, costs in the amount of $2,500, and in the future shall comply with all MFDA by-laws, rules and policies and all applicable securities legislation and regulations.
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In this edition of the Enforcement Roundup, we summarize cases from this past summer. In July and August, there were six enforcement decisions from BC Securities Commission (BCSC) panels and one settlement agreement. We also feature a BC Supreme Court decision related to a BCSC investigation. The Mutual Fund Dealers Association of Canada (MFDA) issued […]