National News

B.C. fraud case draws $11M in penalties

By The Canadian Press

VANCOUVER - Regulators in British Columbia have announced penalties totalling more than $11 million against two men and two companies in an alleged fraud involving the sale of securities in properties under foreclosure.

Besides the fines and administrative penalties, a panel of the British Columbia Securities Commission also permanently banned Theodore Ralph Everett and Robert H. Duke from trading in securities or from engaging in investor relations activities.

In an announcement Thursday, the BCSC said the panel found that Everett and Duke, along with Micron Systems Inc. and Independent Academies Canada, distributed securities to 126 investors for proceeds of $5.1 million without filing a prospectus, perpetrated a fraud by distributing securities to 55 investors for proceeds of $1.45 million, and traded securities in violation of a cease trade order.

In its decision, the panel found that Everett and Duke sold securities when they knew that the property they told investors would be developed with their money was in foreclosure.

"In fact, they raised some funds after the court had ordered the sale of the property," the commission said.

In its sanctions decision, the panel noted that Everett's and Duke's "deceitful conduct was directly responsible for the harm done to the IAC and Micron investors," and that they also "enriched themselves at investors' expense."

The panel ordered that Everett and Duke be permanently banned from trading in securities, purchasing securities or exchange contracts, and from becoming or acting as a director or officer of any issuer or registrant.

They are also permanently prohibited from becoming or acting as a registrant or promoter, from engaging in investor relations activities and from acting in a management or consultative capacity in connection with the securities market.

The respondents were ordered to pay to the commission the $5,433,189 obtained as a result of their misconduct and said that Everett and Duke are jointly and severally liable to pay an administrative penalty of $7 million.

IAC and Micron have been permanently cease traded.

A third respondent, Leonard George Ralph, was named in the original notice of hearing issued in January 2013 but subsequently entered into a settlement agreement with commission's executive director.

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.

You might like ...

Burnaby mosque receives threats
 
Hugs stomp slugs this week
 
Election 2014: Election debate turns to sprawl
Joanne Wilton Q & A
 
The Outdoor Guy
 
Editorial cartoon, Oct. 23, 2013
Qualicum Beach man fears for future of big, old tree on the beach
 
LNG tax drops in softer gas market
 
Tourney results flip-flop

Community Events, October 2014

Add an Event

Read the latest eEdition

Browse the print edition page by page, including stories and ads.

Oct 24 edition online now. Browse the archives.