BC Securities Enforcement Roundup – December 2013
In December 2013, the BC Securities Commission issued two settlements, three notices of hearing, and announced a Supreme Court of Canada decision upholding a commission panel’s decision. The Investment Industry Regulatory Organization of Canada (IIROC) released one settlement in December 2013 relating to a BC resident. The Mutual Fund Dealers Association did not release any BC-related decisions or settlements during December 2013.
You can find a summary of the recent matters below.
The Supreme Court of Canada (SCC) dismissed McLean’s appeal of a decision of the British Columbia Court of Appeal, which upheld a British Columbia Securities Commission reciprocal order.
In May 2010, the BCSC issued a reciprocal order mirroring the sanctions McLean agreed to with the Ontario Securities Commission in 2008. In its decision dismissing McLean’s appeal, the SCC recognized that modern securities markets transcend provincial borders, and that inter-jurisdictional cooperation among regulators is indispensable. The court held that the BCSC’s interpretation of the limitation period “strikes a reasonable balance between facilitation of interprovincial cooperation and the underlying purposes of limitation periods.”
Chung admitted that he illegally sold securities in a BC-based company that is now defunct. Chung raised $400,000 from four individual investors by issuing promissory notes, offering investors a 20% per year return on their money. Under the agreement, Chung is banned from the province’s capital markets for five years. The agreement noted that Chung personally invested over $100,000, and did not recover any of his investment.
Kocken, Ball and Bralorne admitted to breaching Canadian mining rules. Kocken and Ball, as directors of Bralorne, admitted to authorizing, permitting, or acquiescing the company’s s contraventions, thus breaching BC securities laws.
Bralorne contravened BC securities laws when it filed a technical report with the BCSC that included information from an economic analysis that it had previously retracted in a news release, as the analysis did not comply with Canadian mining rules. The technical report, a corporate presentation, and a fact sheet referencing the retracted information were also put on the company’s website.
Under the agreement, Kocken and Ball each agreed to pay $20,000 to the BCSC. They also agreed to complete a course on the requirements of Canadian mining rules within one year from the date of the settlement.
An IIROC hearing panel settled with Chiu, who admitted that between 2006 and 2010, he failed to use due diligence to ensure that the orders he placed for a client were suitable for her. Chiu agreed to a $20,000 fine, disgorgement of $2,000, and costs of $3,000. He also agreed to a 30-day suspension, a six-month period of close supervision following completion of the suspension. Finally, he agreed to complete the Conduct & Practices Handbook course by September 1, 2014.
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