A Vancouver Island radio infomercial host who defrauded clients and listeners has been fined $17.5 million.
The B.C. Securities Commission panel found David Michael Michaels guilty in August of illegally advising almost 500 clients to illegally purchase more than $65 million in securities exempt from prospectus requirements.
In addition to the multimillion-dollar fine, the BCSC has also permanently banned Michaels from participating in the province’s capital markets, the agency announced November 5.
The BCSC said the ex-infomercial host made $5.8 million in fees and commissions from advising these clients — many of whom are seniors.
But $40 million of the $65 million invested was lost and most of the rest remains at risk.
The commission’s executive director had sought a penalty of $65 million.
Michaels’ sanctions are the second-highest financial penalty imposed by the commission, commission executive director Paul Bourke said from Vancouver. “This is very serious conduct and we are trying to deter it in others.”
In 2010, Sung Wan (Sean) Kim was ordered to pay $47 million. He is in jail in Korea and has not paid, Bourque said.
Michaels promoted his business through a weekly radio show on CFAX 1070.
The average age of his clients was 72, the panel said. “Most investors of this age have little or no opportunity to earn income from work or otherwise financially recover lost amounts.”
With files from Carla Wilson, Victoria Times Colonist
