BC Securities Enforcement Roundup – March 2016

BC Securities Enforcement Roundup – March 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 three BCSC enforcement decisions and three Mutual Fund Dealers Association of Canada (MFDA) decisions.

For more detailed information on the cases listed below, click the links to view the news release, which is available at bcsc.bc.ca.

BCSC Settlement Agreement – Gordon Eberwein

In a settlement agreement with the BCSC, Eberwein admitted that he engaged in “wash trades” that created a misleading appearance of trading activity in a company traded on the TSX Venture Exchange.

Eberwein acknowledged that his actions led to a misleading appearance of trading activity in the shares of Ackroo Inc. He has paid $15,000 to the BCSC, and is prohibited from trading and purchasing any securities or exchange contracts for a period of four years (with limited exceptions).

BCSC Settlement Agreement – Patrick Aaron Dunn

In a settlement agreement with the BCSC, Patrick Aaron Dunn admitted that he sold securities in breach of securities laws.

Dunn acknowledged that his conduct breached securities laws regarding prospectus and registration requirements. He paid $11,000 to the BCSC, and is prohibited from trading in securities (with limited exceptions), becoming or acting as a director or officer of any issuer or registrant (with limited exceptions) and from becoming or acting as a promoter or registrant (with limited exceptions) for a period of two years. Dunn is also banned, for the same period, from acting in a management or consultative capacity in connection with the securities market, and from engaging in investor relations activities.

BCSC Liability Decision – John “Johny” “JFA” Ferdinand Alexander Spangenberg, Odyssey Reneweable Growth Inc., geoTreasures Clean Energy Limited

A BCSC panel that Spangenberg and two corporate respondents fraudulently raised over $170,000 from at least six B.C. residents in exchange for shares in Odyssey Renewable Growth Inc. and geoTreasuries Clean Energy Limited.

Neither Odyssey nor geoTreasures has ever filed a prospectus in BC.

Consequently, the panel also found that Spangenberg and both corporate respondents breached securities laws pertaining to prospectus requirements.

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

MFDA Settlement Agreement – Ronald Gibson

In the settlement agreement, Gibson admitted that he obtained, maintained and, in some instances, used to process transactions, 19 pre-signed account forms in respect of 16 client accounts, contrary to MFDA rules. Gibson also admitted that he falsified and, in some instances, used to process trades, five account forms in respect of six clients, contrary to MFDA rules.

Gibson paid a fine of $10,000, and costs of $2,500.

MFDA Settlement Agreement – Nathaniel Ming Shan Chan

In the settlement agreement, Chan admitted to falsifying at least two client signatures on account forms and used the account forms to update information in the clients’ accounts, contrary to MFDA rules.

Chan paid costs of $1,500 and is prohibited from conducting securities related business for a period of one month.

MFDA Settlement Agreement – Lakhjit Sarang

In the settlement agreement, Sarang admitted that he engaged in personal financial dealings with a client that gave rise to a conflict of interest, which Sarang failed to address, contrary to MFDA rules. Sarang also admitted to engaging in another gainful occupation which was not disclosed to or approved when he was a shareholder and director of a corporation.

He also admitted to misleading an MFDA Member, thereby interfering with the Member’s ability to supervise Sarang.

Sarang paid a fine of $7,500, costs of $2,500, and has been permanently prohibited from conducting securities related business.