Enforcement Roundup – March 2019
This edition of Enforcement Roundup covers two British Columbia Securities Commission (BCSC) criminal cases, two sanctions decisions, and reciprocal orders against two men. We also cover a Mutual Fund Dealers Association of Canada (MFDA) decision and an Investment Industry Regulatory Organization of Canada (IIROC) settlement agreement with sanctions acceptance.
BCSC Criminal Enforcement Cases
Figueiredo, a Port Moody resident, was sentenced to prison for violating a permanent ban on capital market activities.
Figueiredo, 58, pleaded guilty to one count of breaching a BCSC order, and will serve the three-month sentence consecutively with a 3½-year sentence for fraud charges brought by the Surrey RCMP. He also will be on probation for two years following his release from custody. He was ordered to pay $1.8 million in restitution to the victims of the fraud.
Cho pleaded guilty to eight charges resulting from an investigation by the BCSC’s Criminal Investigations branch. He was sentenced to 15 months in jail. Cho has approximately nine months remaining on his total sentence; he must also serve 18 months’ probation.
BCSC Panel Decisions
A BCSC panel imposed penalties and market bans against Khorchidian, Deyrmenjian, Craven and a Swiss wealth management firm after finding that they were involved in market manipulation.
The BCSC panel ordered that Khorchidian to disgorge $7.15 million, and pay an $850,000 administrative penalty. Deyrmenjian was ordered to disgorge $7.14 million, plus pay an administrative penalty of $700,000. Craven was ordered to pay an $850,000 administrative penalty, resign any position he holds as a director or officer of an issuer or registrant, and permanently prohibited from taking any such role.
Both Deyrmenjian and Khorchidian must also resign any position they hold as a director or officer of an issuer or registrant, and are permanently prohibited from taking any such role. The BCSC panel also imposed various permanent bans on capital market activities against Khorchidian, Deyrmenjian, and Craven.
The panel also imposed a $700,000 administrative penalty on EHT Corporate Services S.A., a Swiss firm formerly known as EuroHelvetia TrustCo. The panel also imposed various permanent bans on capital market activities against EHT.
Loughery, a Pitt Meadows resident, and an Alberta company were sanctioned by the BCSC for breaching a 2002 cease trade order issued against the company.
A BCSC panel imposed a $50,000 administrative penalty on Loughery, as well as various six-year bans on capital market activities. Military International Limited was ordered to pay $170,000 plus an administrative penalty of $20,000. In addition, the 2002 cease trade order will continue for at least a further five years, and will not be lifted until the company’s penalties are paid.
A BCSC panel reciprocated enforcement orders against two men who pleaded guilty to investment fraud in two separate criminal cases.
The panel ordered various permanent bans on capital market activities against Chieduch. Chieduch had pleaded guilty in B.C. Provincial Court in Kamloops to a single count of fraud in connection with the defrauding of eight investors in a Ponzi scheme between 2005 and 2010. He was sentenced in 2012 to two years in jail.
The panel ordered various 4-year bans on capital market activities against Adam. Adam pleaded guilty in U.S. federal court in 2015 to conspiracy to commit securities fraud and mail fraud for his part in a stock market manipulation scheme involving a publicly-traded company, Lido International Corporation. He was sentenced by the U.S. federal court to time served.
An MFDA panel made findings of misconduct against McIvor. He had previously done business in the Thompson, Manitoba and Kelowna, B.C. areas. The panel imposed a $30,000 fine and costs of $7,500. The panel advised that it will issue written reasons at a future date.
An IIROC panel accepted a settlement agreement, with sanctions, between IIROC staff and Newbury.
Newbury admitted he made unsuitable recommendations for a client and used his own discretion to execute transactions in that client’s account – contrary to dealer member rules. The conduct occurred while Newbury was a registered representative with the Vancouver branch of IIROC-regulated Haywood Securities Inc. He is no longer a registrant with an IIROC-regulated firm.
Mr. Newbury agreed to a six-month suspension from registration in any capacity, a fine of $10,000, and a requirement to successfully rewrite the Conduct and Practices Handbook Examination. Future registration will be subject to a one-year period of close supervision.
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 BCSC’s online complaint form.