BC Securities Enforcement Roundup – August 2013
In August 2013, the BCSC released four enforcement decisions, one temporary order and six notices of hearing. IIROC released one settlement agreement in August 2013 relating to BC-based corporation. The MFDA released no decisions in August 2013 relating to BC residents.
Below is a summary of some of the August 2013 enforcement cases.
A BCSC panel found that Cho committed fraud, made false statements, and illegally distributed securities.
The panel found that Cho used his various businesses, including Chosen Media and Groops Media, to raise $101,846 from five investors. Cho admitted to promising extremely high rates of return that were “risk free”.
The panel stated that, “as a result of [Cho’s] dishonest conduct, investors’ pecuniary interests were put at risk and three of the five investors suffered actual loss.”
The BCSC panel will make its sanctions decision at a later date
A BCSC panel permanently cease traded Aviawest after finding that it distributed several million dollars’ worth of promissory notes to at least 150 investors, and in so doing contravened the Securities Act. The panel found that the Pearsons and DiCastri also contravened the Act by facilitating Aviawest’s illegal distribution. The panel dismissed the allegations against Lawrence Pearson.
The panel imposed no sanctions against the Pearsons or DiCastri. The panel concluded that they pose no threat to investors or markets, and that orders are not required to deter them from future misconduct.
A BCSC panel dismissed allegations that Canaco breached securities laws concerning the disclosure of material changes. The panel also dismissed allegations that Smith, Smallwood, Parsons and Lock failed to act in the best interests of the company by voting to approve the issue of stock options before publicly disclosing assay results.
The panel found that Canaco’s assay results were not a material change or a material fact relating to Canaco.
A BCSC panel upheld an IIROC panel’s decision that Steinhoff breached IIROC’s suitability rules. The BCSC panel set aside the finding that Steinhoff misled Wellington West. It also set aside the penalties the IIROC panel had imposed.
The BCSC panel will make its sanctions decision at a later date.
The BCSC’s executive director issued a temporary order and notice of hearing against Bank Gutenberg. The temporary order prohibits Bank Gutenberg from trading in or purchasing any securities and from engaging in investor relations activities. The allegations in the notice of hearing have not been proven.
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