Enforcement Roundup: December 2021

In this edition of the Enforcement Roundup, we discuss enforcement activities from the British Columbia Securities Commission (BCSC) and additions to the Investment Caution List. We also highlight two settlement agreements from the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC).

BCSC Enforcement

BCSC Criminal Charges

William Everett Graham

Graham has been found not guilty of criminal fraud over $5,000 and criminal theft over $5,000.

Read the news release for full details.

News Release

BCSC Sanctions

Kenneth Edward Smith

A BCSC panel has imposed $20,000 in financial sanctions on a former investment advisor who made a false or misleading statement when he lied under oath to BCSC investigators. The panel also imposed a reciprocal order against Smith as a result of a 2018 decision by the Investment Industry Regulatory Organization of Canada (IIROC).  

In addition to the financial sanctions, the panel banned Smith from the market for five years, noting that without “protective terms imposed by an order, Smith would pose a significant risk to the public and to capital markets.”

Read the news release for full details.

News Release

BCSC Settlement Agreements

Credential Asset Management

Vancouver-based mutual fund dealer, Credential Asset Management Inc., has agreed to pay $300,000 to the BCSC for providing financial incentives to its representatives for selling certain funds.

As part of the settlement, Credential Asset Management has ended any remaining incentives offered to its head office representatives and dually-employed representatives, and put in place acceptable systems and policies.

The settlement of this matter was a joint effort of the BCSC and the Mutual Funds Dealers Association of Canada (MFDA). Credential Asset Management has entered into its own settlement agreement with the MFDA, agreeing to pay an additional $300,000 to the organization.

Read the news release for full details.

News Release

MFDA Enforcement

MFDA Settlement Agreements

Credential Asset Management Inc.

In the MFDA Settlement Agreement, Credential Asset Management admitted that it failed to establish and maintain adequate policies and procedures, controls and supervision to ensure that it complied with securities legislation relating to internal dealer incentive and sales practices, contrary to MFDA Rules and requirements set out in the mutual funds sales practices national instrument.

The MFDA Hearing Panel fined Credential Asset Management $280,000 and ordered $20,000 in costs.

Read the news release for full details.

News Release

IIROC Enforcement

IIROC Settlement Agreement

Larry Martin

Martin admitted that he failed to properly perform his role as a gatekeeper to the capital markets contrary to IIROC rules.

As part of the settlement, Martin agreed to pay a fine in the amount of $82,000, which includes disgorgement of the approximately $32,000 in commissions earned by Martin in relation to the contravention. He also agreed to pay $20,000 in costs.

Read the news release for full details.

News Release

BCSC Early Intervention

Investment Caution List

The BCSC publishes an Investment Caution List to notify British Columbians about the promotion of unqualified investments and unregistered activity originating from outside of the province. The BCSC also lists businesses connected, or purporting to be connected, to BC that have solicited investors in other jurisdictions to purchase unqualified investments.  

Below are the December additions to the Investment Caution List.

The website (www.nyseuronextspro.com) claims to offer an online cryptocurrency trading platform and we are aware that they accept BC residents as clients.

LocalBitcoins claims to offer an online cryptocurrency trading platform and we are aware that LocalBitcoins accepts BC residents as clients.

Crypto Trade Spot claims to be an online cryptocurrency trading platform and we are aware that Crypto Trade Spot accepts BC residents as clients.

BitAviva claims to be based in Ireland and it also claims to offer investment plans with different rates of return.

Alperta claims to be based in Toronto, Ontario and it claims to offer investment packages with different rates of return.

Cryptofoxa claims to be located in the Georgia, Atlanta and it also claims to offer investment plans for trading in cryptocurrency, forex and binary options.

The website claims to offer an online cryptocurrency trading platform and we are aware that it accepts BC residents as clients.

Burg Exchange claims to offer an online cryptocurrency trading platform and we are aware that Burg Exchange accepts BC residents as clients.

C4U Capital claims to offer accounts for trading in cryptocurrencies, forex, stocks, indices, and futures.

StatusMarkets claims to be based in the Republic of the Marshall Islands and claims to offer trading services in forex, commodities, shares and indices.

The website claims to offer an online cryptocurrency trading platform and we are aware that it accepts BC residents as clients.

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. Subscribe to receive email updates from BCSC InvestRight.

Suggested Reading

Enforcement Roundup: November 2021

Beware of Crypto Scams on Social Media and Dating Sites

Putting Investors First: Client Focused Reforms and Relationship Disclosure

More Resources

Understand Registration

The Enforcement Roundup is a monthly summary of enforcement decisions in British Columbia taken by securities regulators.

Report to Us

The Enforcement Roundup is a monthly summary of enforcement decisions in British Columbia taken by securities regulators.