VANCOUVER, May 8, 2014 /CNW/ - The Executive Director of the British Columbia Securities Commission has issued a notice of hearing alleging that Alfredo Miguel "Michael" Yong and two companies he founded illegally distributed securities. The notice of hearing also alleges that Yong and one of the companies perpetrated a fraud on investors.
The notice alleges that between March and May 2008, Yong promoted and sold shares, primarily to B.C. residents, in Inverlake Property Investment Group Inc. (Inverlake). The shares entitled investors to an ownership interest in the Inverlake land based on one share per acre of land.
At least 28 individuals and corporate entities purchased shares in the Inverlake land, paying the initial $19,500 per share. For approximately 24 investors who purchased 46 shares for $949,650, there was no exemption from prospectus requirements. Inverlake has never filed a prospectus in B.C.
BCSC staff maintains that Inverlake purchased the Inverlake land from the owner for $3,223,000. When promoting and selling shares, Yong told investors that the per-acre share price was based on a purchase price of $6,240,000. Therefore, investors paid almost double the actual purchase price of the Inverlake land.
Furthermore, Yong did not tell investors that:
- he had stopped making mortgage payments on the property;
- a foreclosure application had been made; and
- he had consented to the foreclosure application.
The Inverlake land was foreclosed in January 2014, and returned to the original owner. Investors have lost their entire investment. BCSC staff contends that, by inflating the share purchase price and not telling the investors about the foreclosure of the Inverlake Land, Yong perpetrated a fraud.
The notice also alleges that, in July and August 2008, Yong promoted and sold shares, again primarily to B.C. residents, that entitled investors to an ownership interest in the Wheatland Business Park Ltd. (WBP), another company founded by Yong.
Yong sold shares through WBP, telling investors that the WBP land would be developed and sold at a profit. At least 19 individuals and corporate entities purchased shares in the WBP land at approximately $53,000 per share. For approximately 15 investors who purchased 20 shares for $1,090,470, there was no exemption from prospectus requirements. WBP has never filed a prospectus in B.C.
These allegations have not been proven. Counsel for the Executive Director will apply to set dates for a hearing into the allegations before a panel of commissioners on May 27, 2014, at 9:00 a.m.
You may view the notice of hearing on our website, www.bcsc.bc.ca, by typing Inverlake Property Investment Group Inc., Wheatland Business Park Ltd., Alfredo Miguel Yong, or 2014 BCSECCOM 146 in the search box. Information about disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA).
About the British Columbia Securities Commission (www.bcsc.bc.ca)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE: British Columbia Securities Commission
For further information: Media Contact: Richard Gilhooley, Media Relations, 604-899-6713, Public inquiries: 604-899-6854 or 1-800-373-6393 (toll free)