Learning from others unfortunate experiences
This year’s Enforcement Report tells us many stories of investment fraud. It is instructive to read these stories and learn from them. There are certain themes that need to be re-enforced with investors – in this case promises of high returns with no risk.
A man named Steven Peter Kyllo sold securities to investors with promises of unusually high returns. Instead, he used the money to enrich himself and his family members.
Kyllo, while a resident of British Columbia, used three companies, Frey Mining Company Limited, Meonkopi Resources Inc. and Mercury Capital S.A. to raise money from Canadian and US investors over a four-year period.
Kyllo raised US $1.14 million from 40 unfortunate investors without being registered with the British Columbia Securities Commission (BCSC) or filing a prospectus. (A prospectus is a formal document required by law when a company wants to sell shares to the public.)
Investors were promised high returns that, according to expert testimony, are not legally possible. They were also told that their funds would not be put at risk, another common promise by fraudsters. They believed that their funds would be invested with traders dealing in large private high-yield programs. Not true either.
Kyllo was permanently banned from BC’s capital markets and ordered to pay $250,000 – the maximum penalty the panel could order under the legislation at the time the fraud occurred.
The BCSC panel stated that “fraud is inherently serious. It strikes at the heart of market integrity. Kyllo’s fraud is no different. For years he took investors’ money and used it for his own purposes.”
Learn from their unfortunate experience. A promise of high returns with no risk is a very clear indication that fraud may be involved. Contact us if you are suspicious so that we can investigate and possibly stop an investment fraud.