VANCOUVER, Aug. 6, 2015 /CNW/ - In a settlement agreement with the British Columbia Securities Commission (BCSC), Keith Henry Alexander has admitted that he engaged in unregistered trading and an illegal distribution of securities.
The agreement states that Alexander was an investor in The Little Loan Shoppe, a Ponzi scheme masquerading as a payday loan business. The scheme operated through a group of companies directed and controlled by Doris Nelson. Nelson used existing investors, like Alexander, to bring in new investors, paying the existing investors a percentage of the new funds they brought to the scheme.
Alexander formed two companies to serve as "feeders" into the Little Loan Shoppe. Alexander admits that he used the investor funds to buy promissory notes from the Little Loan Shoppe in the names of these companies. He, in turn, issued promissory notes to the investors. The Ponzi scheme collapsed around April 2009, and investors stopped receiving interest payments from Alexander around late 2008 and early 2009.
Alexander, a B.C. resident during the relevant period, raised approximately $1,440,000 from 13 investors between February 1, 2007, and August 15, 2008 under exemptions from prospectus requirements. On July 24, 2008, one investor gave $20,000 to Alexander. Alexander acknowledges that the distribution to that investor did not qualify for any prospectus exemptions, thereby rendering it an illegal distribution.
Alexander has agreed to pay to the BCSC $7,500 in respect of settlement of this matter, as well as the $20,000 obtained as a result of his misconduct. He is also prohibited from trading in securities (with limited exceptions), and from becoming or acting as a director, officer, promoter, or registrant (with limited exceptions) for a period of three years. Alexander is also banned, for the same period, from acting in a management or consultative capacity in connection with the securities market, and from engaging in investor relations activities.
The agreement notes that Alexander lost his own money in the Little Loan Shoppe scheme, both through investments of his own and by buying the positions of investors who wanted to cash out. He also returned $143,000.00 to investors.
The BCSC has scheduled a separate hearing into the Executive Director's allegations that Nelson committed fraud and an illegal distribution through The Little Loan Shoppe.
You may view the settlement agreement on our website www.bcsc.bc.ca by typing Keith Henry Alexander or 2015 BCSECCOM 304 in the search box. Information regarding 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 (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
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