Enforcement Roundup – July 2018
In this edition of the Enforcement Roundup, we cover four British Columbia Securities Commission (BCSC) enforcement activities. We also summarize two settlement agreements from the Mutual Fund Dealers Association of Canada (MFDA).
BCSC Collection Order
The BCSC obtained a court order from the Third Circuit Court of the State of Hawaii for the sale of property belonging to David Michael Michaels.
The BCSC entered into an agreement with Michaels that will result in the BCSC recovering funds for the benefit of investors. Under the agreement, the Hawaii property will be sold and the BCSC will receive the proceeds. The BCSC will also receive a cash payment of $50,000 from Michaels. The BCSC will then distribute both amounts to investors.
The agreement does not affect the BCSC’s ability to continue to collect against Michaels’ outstanding sanctions. The BCSC will post a notice on its website when the money has been received, along with instructions on how investors can make claims.
BCSC Settlement Agreements
In the settlement agreements, Davidson and Webster admitted that they are liable for misrepresentations to investors and breaches of a cease trade order.
Webster and Davidson will each disgorge $48,000 to the BCSC as part of the settlement. Both men have been ordered to resign any positions they hold as directors or officers of an issuer or registrant.
Webster and Davidson are subject to various market bans that are to remain in effect for at least 12 years.
In a settlement agreement, Reynolds admitted to insider trading.
To settle this matter, Reynolds agreed to pay $15,000 to the BCSC and resign any position he holds as a director or officer of an issuer. He is also subject to other market bans for three years.
In a settlement agreement, Bertram admitted to unregistered trading.
Bertram undertakes to pay $176,970.93 to the BCSC as part of the settlement, which represents the total finder’s fees he received and an appropriate penalty in relation to his misconduct.
MFDA Settlement Agreements
In the settlement agreement, MacDonald admitted to contravening MFDA rules when:
- he obtained, possessed, and used to process transactions, six pre-signed account forms in respect of three clients; and
- he falsified and used to process transactions, eight client account forms in relation to five clients, by altering the client account forms without having the clients initial the alterations.
MacDonald must pay a fine of $6,000, $2,500 in costs, and comply with MFDA rules.
In the settlement agreement, Sedley admitted he signed the signatures of two clients on two account forms and submitted the forms to the MFDA Member for processing, contrary to MFDA rules.
Sedley was fined $2,500 and must pay $2,500 in costs. He is prohibited from conducting securities-related business in any capacity while in the employ of or associated with a MFDA Member for six months.
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 firstname.lastname@example.org. You can also file a complaint or submit a tip anonymous using BCSC’s online complaint form.