BC Securities Enforcement Roundup – March 2014

In March, the BC Securities Commission (BCSC) issued three enforcement decisions and one settlement agreement.  The Investment Industry Regulatory Organization of Canada (IIROC) released one settlement agreement relating to a BC resident. The Mutual Fund Dealers Association (MFDA) did not release any decisions or settlement agreements during March relating to BC residents.

You can find a summary of some of the recent matters below.

BCSC Sanctions Decision – Saafnet Canada Inc., Nizam Dean and Vikash Sami

A BCSC panel permanently cease traded Saafnet and ordered it to pay back over $650,000 it obtained as a result of contravening securities requirements.  The panel also banned Dean and Sami from BC’s capital markets for one year and ordered each of them to pay a $10,000 penalty. The panel noted that Dean and Sami acknowledged their wrongdoing and had obtained legal advice to ensure compliance with the Securities Act. Neither Dean nor Sami had any prior disciplinary history, and neither was enriched through their activities in Saafnet.

In October 2013, a commission panel found that Saafnet, Dean, and Sami illegally sold securities to 14 investors.

In the original notice of hearing issued in August 2012, BCSC staff also named Daljinder Nagra. He settled with the Executive Director in May 2013.

BCSC Liability Decision – Theodore Robert Everett, Robert H. Duke, Micron Systems Inc. and Independent Academies Canada (IAC)

A BCSC panel found that Everett, Duke, Micron and IAC committed fraud, illegally distributed securities and breached the terms of a cease trade order.  The distribution related to a development known as Sage Hills. IAC said it planned to develop a mixed-use community there focused on private education with a sports and educational orientation, which subsequently went into foreclosure.

The BCSC panel will make its sanctions decision at a later date.

In the original notice of hearing issued in January 2013, BCSC staff also named Leonard George Ralph. He settled with the Executive Director in October 2013.

BCSC Liability Decision – Alexander Anderson, Ken Chua, and Oriens Travel and Hotel Management Corp.

A BCSC panel found that Anderson, Chua, and Oriens, a Nevada-based company whose securities are quoted on the Pink Sheets in the U.S., engaged in an illegal distribution of securities, and breached a cease trade order.

The BCSC panel will make its sanctions decision at a later date.

BCSC Settlement Agreement – Stephen B. Squires and Quantum Materials Corp.

Squires admitted that he and his company, Quantum Materials Corp., illegally distributed securities in breach of a cease trade order. Squires is a U.S. resident and acted as Quantum’s Chief Executive Officer.

Under the agreement, Squires agreed to pay $15,000 to the BCSC and Quantum and Squires are also banned from the province’s capital markets for five years.

The agreement notes that Squires and Quantum cooperated with the Executive Director in reaching the settlement agreement.

IIROC Settlement Agreement – Gordon Bruce Dickson

An IIROC hearing panel announced this month that it had settled with Dickson, who admitted that he failed to adequately supervise registered representatives in relation to activities in client accounts. Dickson agreed to a $60,000 fine and to a five-year suspension from acting in a supervisory capacity.

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