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May 14, 2018 9:22 am | Author: Dan

Enforcement Roundup – April 2018

In this edition of the Enforcement Roundup, we cover three British Columbia Securities Commission (BCSC) panel decisions and three Mutual Fund Dealers Association of Canada (MFDA) settlement agreements.

BCSC Panel Decisions

SBC Financial Group Inc. and Prabhjot Singh Bakshi

The panel found that Bakshi and SBC Financial Group Inc. traded securities without being registered and without filing a prospectus. In the same decision, the panel dismissed allegations of fraud against Bakshi.

The panel found that Bakshi and SBC breached the Securities Act by:

  •  trading in securities without being registered in the amount of $2,675,238; and,
  • selling securities without a prospectus and without an exemption from the prospectus requirement with respect to 45 issuances of securities for $1,535,238.

The panel also found that Bakshi was liable for SBC’s contraventions of the Act. The allegations of fraud, unregistered trading, and selling securities with a prospectus were dismissed because the transactions were not securities.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings. You will find the news release, hearing schedule, and hearing documents in the hearing file on the BCSC website.

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Garo Aram Deyrmenjian, Raffi Khorchidian, David Craven, and EuroHelvetia TrustCo. S.A. (now EHT Corporate Services S.A.)

A BCSC panel found that Deyrmenjian, Khorchidian, Craven, and EHT Corporate Services S.A. were involved in a market manipulation.

The panel found that starting on January 25, 2011, a tout sheet marketing campaign created an artificial share price for a Nevada company called Kunekt. The panel found that Deyrmenjian and Khorchidian each engaged in conduct that resulted in or contributed to the artificial price.

The panel also found that EHT paid an invoice for services relating to the tout sheet campaign, and that in his role as a managing director, Craven authorized that payment. The panel found that EHT’s conduct resulted in or contributed to the artificial price and that Craven authorized, permitted, or acquiesced in EHT’s conduct.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings. You will find the news release, hearing schedule, and hearing documents in the hearing file on the BCSC website.

Stewart Douglas Loughery and Military International Limited

A BCSC panel found that Loughery and Military International Limited breached a cease trade order.

The panel found that between November 1, 2010, and December 11, 2011, the respondents breached the cease trade order when Military entered into loan agreements with six investors for total proceeds of $170,000.

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Although Loughery was an undischarged bankrupt during the relevant period, the panel found that he was acting as either or both a de facto director or officer of Military at the relevant time. The panel also found that as a de facto director or officer of Military, Loughery authorized, permitted or acquiesced to Military’s breach of the cease trade order, and is therefore liable for that breach.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings. You will find the news release, hearing schedule, and hearing documents in the hearing file on the BCSC website.

MFDA Settlement Agreements

Navdeep Sandhu

In the settlement agreement, Sandhu admitted that he obtained, possessed, and used 83 pre-signed account forms in respect of ten clients between April 2010 and June 2016. This conduct was contrary to an MFDA rule.

Sandhu received a $15,000 fine and must pay costs of $2,500. He is prohibited from acting as a branch manager or supervisor while being employed by or associated with any MFDA member for 12 months. Sandhu must also complete the Branch Manager Course prior to acting as a branch manager.

Larry Williams

In the settlement agreement, Williams admitted that he contravened two MFDA rules due to his conduct when he participated in an investment club with two clients.

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For his misconduct, Williams must pay a fine of $5,000 and costs of $2,500, according to a payment schedule outlined in the settlement agreement.

Saied Jamshidi

In the settlement agreement, Jamshidi admitted that he behaved in a manner contrary to an MFDA Rule when he signed and submitted an account form with a client’s signature, to a MFDA member. He then falsely represented to his assistant branch manager that a client had attended the branch and signed an account form.

For his misconduct, Jamshidi must pay a fine of $5,000, costs of $2,500, and comply with the MFDA rule he contravened.

Report a Concern

If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries 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 anonymous using BCSC’s online complaint form.

InvestRight.org is the British Columbia Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.

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