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BC Securities Enforcement Roundup – October 2012

In October 2012, the British Columbia Securities Commission issued one notice of hearing, two decisions, and reasons for revoking a temporary order. BCSC staff, with the help of the police, made one arrest.  During October 2012, IIROC released one settlement agreement relating to a BC registrant, and the MFDA released one decision against a BC registrant.

We’ve included a summary of a few of the cases below:

Arrest – Kelly Fielder

The British Columbia Securities Commission’s Criminal Investigations Team and the Vancouver Police Department arrested Fielder and charged him with fraud over $5,000 and theft over $5,000. Both are Criminal Code charges that have not been proven.

BCSC Findings and Sanctions – Gaia Equity Investments, Midas Group Holdings Ltd., and Samuel Richard Allaby

A British Columbia Securities Commission panel permanently banned Allaby, Midas and Gaia from the province’s capital markets and fined Allaby $50,000.

The panel found that Allaby knowingly made false statements while promoting Gaia Equity Investments, a purported company claiming to guarantee B.C. investors a risk-free monthly rate of return of up to 9.83% through investments in renewable energy projects in developing countries. In its decision, the panel stated that Gaia is effectively a division of Midas Group Holdings Ltd, a company incorporated by Allaby and for which he is the sole director.

BCSC staff investigated the case after finding an advertisement that promoted the Gaia investment on the classifieds website, Craigslist.

BCSC Findings and Sanctions – Paul Lester Stiles

A British Columbia Securities Commission panel permanently banned Stiles from the province’s capital markets and fined him $35,000.

The panel found that between 2009 and 2012, Stiles promoted an investment in Velocity Entertainment Inc. that he claimed would provide B.C. investors with returns ranging from 12% in one year to 100% within six months. Stiles was the sole director of Velocity, which was dissolved in 2005 and has never filed a prospectus in B.C.

The Velocity Entertainment investment was also promoted on the classified website, Craigslist. In its decision, the panel noted that Stiles ignored BCSC Staff warnings that his capital raising activities contravened securities laws.

The panel characterized Stiles’ disregard of BCSC staff warnings as “contempt for our system of securities regulation”, and stated that his conduct “shows that he has attempted fraud before and will continue to do so.”

IIROC Settlement– Samuel Ryan Scoten

A hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and Scoten.  Scoten admitted that he solicited and facilitated the purchase of shares without his employer’s consent, he engaged in discretionary trading, and that he provided IIROC staff with information that he knew, or ought to have known, was false.

Scoten consented to a three-year prohibition from approval in any capacity from IIROC, and that he takes approved courses before being eligible for approval.  He will also be subject to one year of strict supervision once reapproved.  He agreed to pay IIROC a fine of $50,000 and costs of $5,000.

Access to more cases

BCSC cases

Notice of hearing: Jefferson Franklin Mesidor

Reasons for decision re temporary order: Yan Zhu (also known as Rachel Zhu), Guan Qiang Zhang, and Bossteam E-Commerce Inc

SRO cases

MFDA decision re Raymond Ho

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