Law

B.C. man and company sanctioned for illegal distribution of securities

Thu Nov 15, 2012 10:00am PST

Berkeley Coffee & Tea Inc. and its CEO, president and sole director, Sean Tan, have reached a settlement with the British Columbia Securities Commission after admitting to illegally distributing securities within the province.

Berkeley distributed shares to 59 investors in April of 2011, with 44 of those investors from B.C., 11 from Alberta, one from the U.S. and two from Hong Kong.

A total of US$500,000 ($484,590) was raised after providing investors with a copy of a prospectus that the company had previously filed with the U.S. Securities and Exchange Commission. The prospectus did not meet the offering memorandum requirements of B.C.’s securities legislation.

Berkeley filed an exempt distribution report with the BCSC on May 6, 2011, claiming that the securities had been sold under the family, friends and close business associates exemption, although most investors did not qualify for this exemption.

B.C. resident Tan has agreed to pay $10,000 to the BCSC, agreeing that he was responsible for the company’s breaches of the Securities Act.

In addition to the fine, Tan and Berkeley must adhere to the following:

  • Tan is prohibited from becoming or acting as a director or officer of any issuer;
  • Tan may not engage in any investor relation activities until the later of three years from the date of the order and the date he has completed a BCSC-approved directors and officers course; and
  • Berkeley must carry out future capital-raising activities through an exempt market dealer or registrant.

Tan is permitted to remain a director and officer of Berkeley, as well as its wholly owned subsidiary, DTS8 Holdings Co., Ltd.

ecrawford@biv.com

@EmmaCrawfordBIV

Tags: securities, U.S. Securities and Exchange Commission, British Columbia Securities Commission



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