Law

BCSC fines directors $6.9m for securities misconduct


Thu Jan 10, 2013 10:00am PST

The BC Securities Commission (BCSC) has permanently banned two directors of a B.C. company and fined them $6.9 million for breaching securities laws.

Last August, a BCSC panel found that Ingram Jeffrey Eshun, Maisie Smith aka Maizie Smith and JV Raleigh Superior Holdings Inc. traded and distributed securities without complying with the registration and prospectus requirements of B.C.’s securities laws.

The panel found that the respondents raised approximately $5.7 million by entering into illegal loan agreements with 81 investors. According to the BCSC, the loan agreements stipulated that JV Raleigh would use the money to purchase “consumer secured notes receivable,” which the company alleged typically had high yields.

“There is no evidence that the company used any of the funds for this purpose,” the BCSC said in a release.

The BCSC panel said that it appeared that the investors’ funds were given to companies of which Eshun and Smith were directors and officers, including:

  • $1.9 million transferred to Trem DY Group Inc., of which Eshun is president and a director;
  • $1.5 million to DSC Lifestyle Services, of which Eshun is president and a director;
  • $370,000 to 0747940 B.C. Ltd. of which Smith is sole director; and
  • $234,426 to Siboco Marketing Inc., of which Eshun and Smith are sole directors.

In its latest decision, the panel has ordered the respondents to pay to the commission the $5.7 million obtained “as a result of their misconduct.” The regulator has further ordered Eshun and Smith to pay administrative penalties of $750,000 and $500,000, respectively.

The BSCS panel has also permanently banned Eshun from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant. The regulator has further banned him from 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 BCSC has permanently banned Smith, with limited exceptions, from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant. The regulator further permanently prohibited her 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.

jwagler@biv.com

@JennyWagler_BIV

Tags: securities, British Columbia Securities Commission



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