BC Securities Enforcement Roundup – August 2014

In August, the BC Securities Commission (BCSC) issued one notice of hearing, three enforcement decisions, and a news release about reciprocal orders against three individuals. The Investment Industry Regulatory Organization of Canada (IIROC) and Mutual Fund Dealers Association (MFDA) did not release any decisions or settlements relating to BC residents.

You can find a summary of some of these matters below.

BCSC Sanctions Decision – Alexander Anderson, Ken Chua, and Oriens Travel and Hotel Management Corp.

A BCSC panel banned Chua from BC’s capital markets for six years. Chua was also ordered to pay to the commission the US$58,500 obtained as a result of his and Oriens’ misconduct. He and Oriens are jointly and severally liable for this amount. Furthermore, Chua was ordered to pay an administrative penalty of $35,000.

The panel banned Anderson from BC’s capital markets for two years and ordered him to pay a penalty of $15,000.

The panel also permanently cease-traded Oriens.

In March 2014, a commission panel found that Anderson and Chua distributed shares of Oriens Travel and Hotel Management Corp. to three B.C. residents without filing a prospectus, and for which no prospectus exemptions were available.

BCSC Liability Decision – David Michael Michaels

A BCSC panel found that between June 2007 and December 2010, Michaels, a former mutual fund salesperson, illegally and fraudulently advised 484 clients to purchase over $65 million of exempt market securities. In its decision, the panel found that Michaels acted as an adviser without being registered as required.

The BCSC panel will make its sanctions decision at a later date.

BCSC Liability Decision – Yan Zhu (also known as Rachel Zhu), Guan Qiang Zhang, and Bossteam E-Commerce Inc.

A BCSC panel found that Zhu, Zhang, and Bossteam E-Commerce Inc. committed numerous securities-related infractions, including fraud, illegally distributing securities, and withholding information from BCSC investigators and instructing their employees and investors to do the same.

The BCSC panel will make its sanctions decision at a later date.

Access to more cases

BCSC

Notice of Hearing: Robert Scott Morrice, and Donald Gordon Byrne

Reciprocal Orders – Shafi Khan; Michael Schmauer; and, Marvin Winick