BC Securities Enforcement Roundup – June 2016

BC Securities Enforcement Roundup – June 2016

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 seven BCSC enforcement decisions, one IIROC discipline decision, as well as one Mutual Fund Dealers Association of Canada (MFDA) decision.

For more detailed information on the cases listed below, click the links to view the news release.

BCSC Liability Decision – Siu Mui “Debbie” Wong, Siu Kon “Bonnie” Soo, Wheatland Industrial Park Inc., 1300302 Alberta Inc., D&E Arctic Investments Inc.

A BCSC panel has found Wong, Soo and three joint venture companies engaged in illegal distributions and committed multiple acts of fraud.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.

BCSC Settlement Agreement – Asia Finance Corporation Ltd.

In a settlement agreement with the BCSC, Asia Finance Corporation Ltd., a New Zealand company, admitted it traded securities on behalf of BC residents without being registered, contrary to the Securities Act.

Asia Finance paid the BCSC $125,000 USD in respect of the settlement of this matter. Asia Finance has also been permanently banned from trading in or purchasing securities and from engaging in investor relations activities.

BCSC Settlement Agreement – HSBC Investment Funds (Canada) Inc. (HIFC), and HSBC Private Wealth Services (Canada) Inc. (HPWS)

In a settlement agreement with the BCSC, HSBC Investment Funds (Canada) Inc. (HIFC) and HSBC Private Wealth Services (Canada) Inc. (HPWS) have agreed they charged excess fees in some client accounts.

HIFC and HPWS have paid the BCSC $300,000 in respect of the settlement of this matter, and $20,000 in respect of costs.

The agreement notes that HIFC and HPWS cooperated fully with BCSC staff over the course of their review and were quick to implement a compensation plan.

BCSC Sanctions Decision – Mark Aaron McLeary

A BCSC panel issued financial sanctions against McLeary for failing to file insider reports and, because of his history of securities regulatory misconduct, issued permanent market prohibitions.

The panel ordered that McLeary pay an administrative penalty of $25,000.

The panel also issued permanent market bans against McLeary.

BCSC Sanctions Decision – John Ferdinand Alexander Spangenberg, Odyssey Renewable Growth Inc., geoTreasuries Clean Energy Limited

A BCSC panel has permanently banned Spangenberg and two companies he incorporated from BC’s capital markets for perpetrating a fraud on investors and illegally distributing securities.

For their misconduct, the panel permanently prohibited Spangenberg, Odyssey, and geoTreasuries from trading or purchasing securities or exchange contracts. The panel has also permanently banned them from BC’s capital markets, and banned Spangenberg from acting as a director or officer of any issuer.

The panel ordered that Spangenberg pay an administrative penalty of $225,000 to the  BCSC. The panel also ordered that Odyssey pay to the BCSC $69,996 and that geoTreasuries pay to the Commission $101,450, which were amounts the panel found they had obtained as a result of their misconduct.  The panel ordered that Spangenberg is jointly and severally liable for these amounts.

BCSC Liability Decision – Ayaz Dhanani

A BCSC panel has found that Ayaz Dhanani, who went by multiple aliases, perpetrated a fraud on three investors.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.

MFDA Reasons for Decision – Brian Blundell

An MFDA hearing panel has issued its reasons for decision and confirmed its sanctions on Blundell.

Blundell is ordered to pay a fine in the amount of $10,000, costs in the amount of $1,000, and in the future must comply with all MFDA rules, by-laws, policies, and all applicable securities legislation and regulations.

IIROC Liability and Penalty Decision – Kenneth Gottfred

An IIROC hearing panel has found that Gottfred executed discretionary transactions, made unsuitable recommendations, and failed to cooperate with IIROC’s investigation.

The hearing panel imposed the following penalties on Gottfred:

  • a permanent ban from approval with IIROC in any capacity
  • a fine of $50,000; and,
  • costs in the amount of $5,000

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 BCSC’s online complaint form.