The November edition of the Enforcement Roundup highlights six enforcement actions taken by the BC Securities Commission (BCSC) and the Canadian Investment Regulatory Organization (CIRO). It also includes 13 new additions to the Investment Caution List.
GSPartners, GSB Gold Standard Bank Ltd. GSB Gold Standard Corporation AG, Swiss Valorem Bank Ltd., Haidy Nitsa Nakos, Tanya Sue Cloete, and James Bruce Gardiner
The BCSC issued a temporary order as part of a coordinated US-Canada enforcement action to stop the promotion of an investment product called “MetaCertificates.” MetaCertificates shows many typical signs of fraud, and investors have experienced unexpected losses and problems receiving promised returns.
The order prohibits BC promoters of MetaCertificates from engaging in promotional activities on behalf of GSPartners.
The BCSC will return more than $930,000 to an investor who lost money as a result of an illegal distribution of securities. The investor provided $1.75 million to Bracetek Industries Group Ltd. and was assisted in the investment by Geoffrey Rajay Sidhu, the son of Bracetek’s sole officer and director. Bracetek used $900,000 of the investor’s funds for unpaid licensing fees owed to companies controlled by Sidhu.
Under a settlement agreement, Sidhu paid $950,000 to the BCSC, with $900,000 representing the amount that Sidhu obtained as a result of misconduct. The investor was the only one who submitted a claim, and a BCSC panel ordered that they receive the entire amount, plus the interest it has accrued.
A former Richmond resident, Naresh Singh Mann (aka Nash Mann), was given a suspended sentence with probation after pleading guilty to fraud over $5,000. Mann previously pleaded guilty for persuading a Vancouver resident to invest in an online gambling company claiming it would generate returns in six months. Instead of investing the money, he misappropriated the bulk of invested funds.
Mann is given a suspended sentence with 12 months probation. He must also complete 50 hours of community service within nine months of his sentencing.
Alexander William Bridges (aka Alex Blackwell), Shane Douglas Harder-Toews, and Fraser Valley Hop Farms Inc.
A BCSC panel found that Fraser Valley Hop Farms Inc. (FVHF) and a director committed fraud and illegally sold company shares along with their marketing director. FVHF leased a 125-acre farm to grow hops for the craft brewing industry. Alexander Bridges (aka Alex Blackwell) was its sole named director, controlling the company’s bank account, soliciting investors, and deciding what to do with their money. Shane Douglas Harder-Toews FVHF’s marketing director, was a de facto FVHF director.
The panel heard evidence that 13 investors provided funds for FVHF, based on assurances that they would be used for operations. Investor funds totaling about $1.9 million were deposited in an account controlled by Bridges, and at least $498,000 went towards expenses with no “potential legitimate use,” including personal use.
BCSC Settlement Agreement
Michael Louis Young, the former chief financial officer and director of Green 2 Blue Energy Corp. – a company listed on the Canadian Securities Exchange from July 2017 to December 2018 – has agreed to an investment market suspension and paid $25,000 to the BC Securities Commission.
Young, who lived in Vancouver at the time of the misconduct, permitted and acquiesced misrepresentations outlined in Green 2 Blue’s news releases following its announced private placement claiming that the proceeds would go towards facility upgrades, equipment purchases, and general working capital. Five days later, the company announced that it had closed the private placement for gross proceeds of $4.3 million. However, Green 2 Blue did not disclose its intention to spend the private placement proceeds on consultants and that it would retain only 13 per cent of the amount raised, with the remainder spent on consulting fees.
CIRO Settlement Agreement
A hearing panel accepted a settlement agreement with sanctions for Domino Au-Young after he admitted to misappropriating monies from clients’ accounts, misleading his firm and Enforcement staff about the circumstances of the misappropriation, and failing to disclose approval of his employer for outside business interest.
Au-Young agreed to sanctions including a permanent ban from registration, a fine of $125,000, and paying costs in the amount of $7,500.
BCSC Early Intervention
The BC Securities Commission’s Investment Caution List notifies British Columbians about unqualified investments and unregistered activity originating from outside of the province but accept BC residents as clients.
Below are the November additions to the Investment Caution List:
Onefxgroup claims to be located in Ireland and it also claims to offer CFD trading services in commodities, indices, stocks, and currencies.
99Stock trades claims to be located in the United States and it also claims to offer trading services in forex, cryptocurrencies, indices, stocks, and commodities.
Coinegg claims to offer trading and asset management services in cryptocurrencies.
TLC Investments claims to be located in London, UK and it also claims to offer CFD trading services in forex, cryptocurrencies, indices, commodities, spot metals, energies and stocks.
Dodo Pro claims to offer an online cryptocurrency trading platform and we are aware that Dodo Pro accepts British Columbia (BC) residents as clients.
Trex claims to operate on online cryptocurrency trading platform and we are aware that Trex accepts BC residents as clients.
LBT Exchange Ltd. claims to be located in Canada. It also claims to operate an online cryptocurrency trading platform and we are aware that LBT Exchange Ltd. accepts BC residents as clients.
LearnTrade claims to be located in BC. It also claims to offer trading services for stocks, bonds, and derivatives.
Guardian Invest claims to offer trading services in CFDs, currencies, indices, stocks, and commodities.
D.AI.SY (Decentralized AI System), also known as Daisy Global, advertised that it sells crowdfunding packs that direct between 50% and 100% of the proceeds into investment funds. Those funds trade in forex and crypto assets with the assistance of an AI-driven algorithmic trading system to generate profit.
Arbitrage Stack claims to offer arbitrage investment services in different financial markets.
CSE claims to operate an online cryptocurrency trading platform and we are aware that they accept BC residents as clients.
Bitrade-Market claims to offer CFD trading services in forex, indices, cryptocurrencies, commodities, and stocks.
If you have 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 by e-mail at [email protected]. You can also file a complaint using BCSC’s online complaint form.
If you have information relating to fraud or serious market misconduct, you can securely submit tips through our Whistleblower program. Qualified tips may be eligible for cash rewards up to $500,000.