After an undercover investigation, the British Columbia Securities Commission (BCSC) is alleging that a B.C. man broke securities laws while promoting feature film company Velocity Entertainment Inc. on Craigslist.
The executive director of the BCSC has issued a temporary order and notice of hearing alleging that Paul Lester Stiles engaged in illegal distributions and made materially false statements while promoting an investment on Craigslist, the regulator announced yesterday.
The notice alleges that Stiles promoted an investment in Velocity that he claimed would provide B.C. investors with returns ranging from 12% in one year to 100% within six months. According to the BCSC, Stiles was the sole director of Velocity, which was dissolved in 2005 and has never filed a prospectus in B.C.
In July and August 2011, BCSC staff discovered two identical advertisements in the financial services section of Vancouver’s Craigslist website that promoted the Velocity investment.
The regulator said that when a BCSC investigator posed as a potential investor and responded to the advertisements, Stiles sent the investigator an investment agreement claiming, among other things, that Velocity would use the money to produce two feature films.
“Stiles made a number of false statements in promoting the investment, including that it would provide a ‘totally secure’ rate of return of 100% in six months, and provided instructions to transfer funds to his bank account,” the BCSC stated.
The regulator added that its staff discovered a third advertisement promoting Velocity on Craigslist in March 2012. When a BCSC investigator again posed as an investor and responded to the advertisement, Stiles made numerous claims, including that he would guarantee the investment.
BCSC staff allege that by promoting the Velocity investment to the undercover investigators, Stiles breached securities laws by making misrepresentations and illegally soliciting people to buy securities.
These allegations have not been proven.
The first hearing into the allegations before a panel of commissioners is set for May 17.
