This month’s edition of the Enforcement Roundup addresses two BC Securities Commission (BCSC) settlement agreements, one investor alert, a notice of hearing, and two orders. We also include two BC Provincial Court decisions resulting from BCSC criminal investigations, and three enforcement actions from the Mutual Fund Dealers Association of Canada (MFDA).
BCSC Investor Alert
Aggressive Stock Promotion Exploits Fears of Coronavirus Recession
The BCSC and the Alberta Securities Commission (ASC) continue to warn the public to exercise extreme caution about aggressive promotion of Crestview Exploration Inc., a BC gold mining company.
On May 25, 2020, the BCSC updated its investor alert to say: “A letter headlined, ‘A RECESSION IS AROUND THE CORNER,’ was sent to Canadian households in May. The letter refers to the ‘irreparable financial damage’ caused by the lockdown, and then goes on to make the same recommendation of Crestview.” Click the link below to read more.
BCSC Criminal Enforcement
The BC Provincial Court in Salmon Arm sentenced Good to two years of probation, including a term of house arrest, after he was convicted of breaching a BCSC order.
Good was sentenced for engaging in investor relations activities despite being permanently banned by the BCSC in 2007 from doing so. Following an investigation by the BCSC’s Criminal Investigations Branch, Good was charged in 2019 for breaching the BCSC order and was convicted in March 2020.
James Warring Minnie (also known as Terry James Minnie)
The BC Provincial Court in Victoria has sentenced Minnie, a Parksville resident, to four and a half years in prison for defrauding two BC investors of more than half a million dollars. It’s the longest sentence ever imposed as a result of a BCSC criminal investigation.
Minnie was convicted of two counts of criminal fraud over $5,000. In addition to the jail sentence, Minnie has been ordered to repay the victims a total of $543,220 in restitution. He is prohibited from contacting either of the victims.
BCSC Enforcement
Settlement Agreements
SpeakEasy Cannabis Club Ltd., Marc Green
The BCSC has reached a settlement agreement with BC cannabis company SpeakEasy, which participated in conduct abusive to the province’s capital markets.
As a result of SpeakEasy’s response to the allegations and because of the potential impact of financial orders on existing shareholders, the BCSC found it was not in the public interest to issue orders against the company.
The company does not have a history of securities misconduct and fully cooperated with the BCSC’s investigation.
Kim, a former Maple Ridge dealing representative, admitted he that he provided false information about his qualifications in a registration application.
As part of the settlement, Kim is permanently banned from becoming a registrant under the Act, and agreed to pay $10,000 to the BCSC.
Orders
The BCSC has issued temporary orders against the above four companies and two individuals as it investigates possible violations of the registration and prospectus requirements of the Securities Act and a possible breach of a prior BCSC order.
Notice of Hearing
The BCSC alleges Qiao, a former Surrey dealing representative, provided false information about his previous employment in two registration applications.
The BCSC’s allegations have not been proven. The commission will schedule a hearing date in June 2020.
The BCSC has ordered that $2,788, plus interest, be paid to one investor for losses incurred from a fraudulent investment scheme.
Mesidor was found to have committed fraud when he spent money given to him by two investors for purposes other than foreign exchange trading. In 2014, Mesidor was ordered to pay the BCSC $16,000. He was also ordered to pay an administrative penalty of $75,000 and was permanently banned him from BC’s capital markets.
MFDA Enforcement
Settlement Agreements
Berget, who conducted business in the Kelowna, BC area, admitted to contravening an MFDA rule when dealing with multiple client account forms.
Berget must pay a fine in the amount of $11,500, and $2,500 in costs.
Berget must also comply with the contravened rule.
Jaswal, who conducted business in the Surrey, BC area, admitted to contravening multiple MFDA rules.
Jaswal must pay a $5,000 fine and $2,500 in costs. Jaswal is prohibited from conducting securities related business in any capacity while employed by or associated with any MFDA member for 6 months.
Jaswal must also comply with the contravened rules in the future.
Findings
The MFDA hearing panel found that McIvor, who conducted business in the Kelowna, BC area, failed to cooperate with the investigation into his conduct, contrary to an MFDA bylaw.
McIvor must pay a $75,000 fine and $10,000 in costs. McIvor is also permanently prohibited from conducting securities related business in any capacity while employed by or associated with any MFDA member.
Report a Concern
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Contact Centre at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.
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