In this edition of the Enforcement Roundup, we cover three British Columbia Securities Commission (BCSC) settlement agreements, one notice of funds received, and a notice of hearing.
This post also includes a summary of an Investment Industry Regulatory Organization of Canada (IIROC) panel decision and one Mutual Fund Dealers Association of Canada (MFDA) settlement agreement.
BCSC Settlement Agreement
In the settlement agreement, Sim and Sims admitted they breached a cease trade order and illegally distributed securities through First Choice Products Inc.
For their misconduct, Sim has agreed to pay $5,000 to the BCSC and Sims has agreed to pay $3,000. Both men are subject to various market bans that are to remain in effect until the later of the date that they fulfil their payment obligations to the BCSC and March 16, 2020.
Sim and Sims have also agreed to complete a course of study on the duties and responsibilities of corporate officers and directors that is acceptable to the BCSC’s Executive Director, prior to acting as a director or officer of a reporting issuer upon the expiry of their market bans.
In the settlement agreement, Ude admitted that he traded securities without being registered when he promoted and recommended high-yield investment programs to investors
For his misconduct, Ude has agreed to pay $5,000 to the BCSC. Ude is subject to various market bans that are to remain in effect for a period of five years.
He has also agreed to inform all members of Integrity Wealth Builder’s Group, an investors group that Ude formed, that high returns mean high risk, and to direct them to the BCSC’s investor education website InvestRight.org, to protect investors against unsuitable investments.
BCSC and MFDA Settlement Agreement
The BCSC and MFDA entered into settlement agreements with BC resident Winston King-Loong Kuit.
In his agreement with the BCSC, Kuit admitted that he engaged in unregistered trading, unregistered advising, and distributing securities without a prospectus. The agreement also states that although Kuit was registered most of the relevant period, his registration category did not permit him to trade in SBC Financial Group Inc. (SBC) securities.
Between August 2010 and September 2014, Kuit acted as a finder for SBC, a BC company that never filed a prospectus in respect of the distribution of its securities. The investors that Kuit introduced to SBC collectively invested approximately $2.4 million. Approximately $1.8 million of those distributions did not qualify for any exemptions.
In his agreement with the MFDA, Kuit has admitted that between 2010 and August 2013 he solicited approximately $1.55 million in investments in SBC from 18 investors. He also admitted that he provided false or misleading information on a compliance questionnaire submitted to the Member in November 2012, which interfered with the Member’s ability to supervise his conduct.
For his misconduct, Kuit agreed to disgorge $147,500 to the BCSC and to pay $20,000 in respect of settlement of this matter. Kuit also agreed to several market bans that remain in effect for a period of 15 years. Under the terms of the MFDA settlement, Kuit has been permanently prohibited from conducting securities related business in any capacity while in the employ of or associated with any MFDA Member.
BCSC Notice of Funds Received
The BCSC received $75,984.92 from an order against Winston King-Loong Kuit.
The BCSC must make money it receives from this order available to eligible applicants who lost money as a direct result of Kuit’s misconduct. Investors can make a claim to the BCSC using the required form no later than March 21, 2020.
For more information, see the news release.
BCSC Notice of Hearing
The BCSC’s Executive Director issued a notice of hearing alleging that Davidson and Webster, both BC residents, and a company committed fraud using a boiler room and breached a cease trade order.
IIROC Panel Decision
Following a disciplinary hearing held in October 2016, the hearing panel found that Tassone misled IIROC staff during their investigation. The hearing panel also found that IIROC did not establish that Tassone had conducted an unauthorized outside business activity.
A separate hearing will be held to determine the penalty to be imposed on Tassone.
MFDA Settlement Agreement
In the settlement agreement, Ewens admitted he processed approximately 53 authorized discretionary trades as part of a dollar-cost averaging strategy in relation to one client contrary to two MFDA rules.
An MFDA panel ordered Ewens to comply with the two MFDA Rules he contravened, pay an $11,500 fine, and pay costs of $2,500.
Report a Concern
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.
InvestRight.org is the British Columbia Securities Commission’s investor education website.