ASC will apply to Court of Queen's Bench to appoint a Receiver to distribute frozen funds
CALGARY, Aug. 17, 2016 /CNW/ - The Alberta Securities Commission (ASC) has sanctioned Saileshwar Narayan (Narayan), Prospera Mortgage Investment Corporation (PMIC) and Prosperity Development Group Ltd. (PDGL) for engaging in capital market misconduct.
Narayan used PMIC and PDGL to raise over $5.8 million from the public. Narayan, PMIC and PDGL admitted to all allegations contained in the June 8, 2015 Notice of Hearing, including that:
- PMIC and Narayan perpetrated a fraud on PMIC investors;
- PMIC failed to comply with a written undertaking given to the Executive Director of the ASC, made prohibited representations to investors, and illegally traded and distributed its securities;
- PDGL and Narayan perpetrated a fraud on PDGL investors; and
- PDGL made misleading or untrue statements to investors.
As a result, an ASC panel ordered that:
- Narayan disgorge $880,951 obtained as a result of his non-compliance with Alberta securities laws, and pay an administrative penalty of $300,000 and costs of $95,000;
- Narayan is permanently prohibited from trading in or purchasing securities or derivatives or using exemptions under Alberta securities laws (with limited exceptions);
- Narayan is permanently prohibited from acting as a director or officer (or both) of any issuer, registrant, investment fund manager, recognized exchange, recognized self-regulatory organization, recognized clearing agency, recognized trade repository or recognized quotation and trade reporting system;
- Narayan is permanently prohibited from acting as a registrant, investment fund manager or promoter, acting in a management or consultative capacity in connection with activities in the securities market or engaging in investor relations activities;
- PMIC and PDGL are permanently prohibited from trading in or purchasing securities or derivatives, using exemptions under Alberta securities laws or engaging in investor relations activities; and
- all trading in or purchasing of securities of PMIC and PDGL permanently cease.
In its decision, the ASC panel stated: "Given Narayan's dishonesty in raising and spending investors' money, … we are of the opinion that he has little, if any, regard for truth when it comes to separating people from their money. There is nothing more fundamental to the protection of the investor public than telling the truth when raising funds." The ASC panel also noted that a $300,000 administrative penalty would send "a warning to others planning to raise money from the public about the dangers and consequences of fraud, misrepresentation, and failure to follow Alberta securities laws."
A copy of the decision is available on the ASC website at www.albertasecurities.com.
Application to Court of Queen's Bench to appoint a Receiver to distribute frozen funds
The ASC will now apply to the Court of Queen's Bench for the appointment of a Receiver to distribute the frozen funds. The ASC will issue a news release when this is complete with instructions for affected investors.
During the course of its investigation, the ASC issued freeze orders for three accounts belonging to PDGL that held a total of $1.5 million and for an account belonging to PMIC that held $245,000 in order to protect investors' money until a hearing could be conducted and a decision rendered.
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
SOURCE Alberta Securities Commission
For further information: For Media Inquiries: Nicole Tuncay, Senior Communications Advisor, 403.297.4008; For Investor Inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488