BC Securities Enforcement Roundup – August 2012
We are starting a monthly roundup of BC securities enforcement actions. This new monthly posting comes out of meetings with focus groups of investors who indicated they wanted this information. In addition to BCSC decisions, settlement and arrests, we may also include decisions or settlements of self-regulatory organizations, such as the Investment Industry Regulatory Organization of Canada (IIROC) or the Mutual Fund Dealers Association (MFDA), when the decisions relate to individuals in BC.
In August 2012, the BCSC issued six notices of hearings and one decision on findings. BCSC staff made one arrest, with help from the police. During August 2012, IIROC released one decision on findings and one settlement agreement relating to registered individuals in BC. The MFDA released one decision against a registered individual in BC.
We’ve included a summary of a few of the cases below:
The British Columbia Securities Commission’s Criminal Investigations Team and the Saanich Police Department arrested Barton and Gillespie and charged them each with two counts under the Securities Act. The charges relate to selling securities without being registered and selling securities without a prospectus.
The BCSC is alleging that in 2008 and 2009, Barton and Gillespie distributed securities related to a purported real estate investment centred on 1250604 Alberta Ltd, an Alberta company controlled by Barton and doing business as both Oasis Properties and Caprice Investments. It is further alleged that Barton and Gillespie actively solicited investments in Oasis/Caprice without being registered, filing a prospectus or applying for exemptions.
The charges against Barton and Gillespie have not been proven.
A British Columbia Securities Commission panel found that JV Raleigh, Smith and Eshun breached securities laws by selling securities without being registered.
The panel found that JV Raleigh Superior Holdings Inc. entered into loan agreements with 81 investors between July 2006 and January 2009, raising approximately $5.7 million. The investors included 49 B.C. residents, who invested $3.2 million. The loan agreements are securities as defined under the Securities Act.
Smith and Eshun, each owned 50 per cent of JV Raleigh, and were the company’s two directors. Like the company, neither was registered to sell securities in BC.
Under the loan agreements, JV Raleigh was to borrow money from investors to purchase “consumer secured notes receivable”, which JV Raleigh described as “a form of factoring” with typically “high yields.”
A hearing panel found that Myatovic and Lowe failed in their roles as gatekeepers by facilitating manipulative or suspicious trading activity in several client accounts, thereby engaging in conduct unbecoming contrary to IIROC rules.
Both Myatovic and Lowe prearranged trades and took instructions from individuals who were not the relevant account holder.
Access to more cases
Send us your comments
If you like this or have changes to suggest, let us know by sending in a comment.