Two residents of British Columbia and a company committed fraud and breached a cease trade order (CTO), the British Columbia Securities Commission alleged March 1.
The BCSC alleges that between October 2013 and February 2014, Darren Scott Davidson, Paul Webster and Titan-West Explorations Ltd. committed fraud using a “boiler room” tactic. This is a type of scheme where salespeople use high-pressure techniques to push investment schemes on unsophisticated investors, according to BCSC’s InvestRight glossary.
The two individuals operated the boiler room to sell shares in Titan-West. Webster and other callers cold-called and emailed prospective investors from call lists provided by Davidson. Four investors that these callers contacted invested a total of $172,000 in the company.
“The respondents failed to disclose to prospective investors that Titan-west had an operating loss of $566,050 on gold revenue of $41,307 in 2012,” the BCSC said in its allegation.
“Instead, they disclosed an outdated 2012 ‘pro forma’ financial statement with gross revenue of $12 million and net operating income of $6,959,418, which they knew to be inaccurate.”
The BCSC issued a CTO on February 13, 2014. After this time, the callers continued to solicit potential investors.
The allegations have not been proven. The BCSC said it will apply to set dates for a hearing before a panel March 21.
@EmmaHampelBIV
