VANCOUVER, Feb. 6, 2014 /CNW/ - The Executive Director of the British
Columbia Securities Commission has issued a temporary order and notice
of hearing alleging that five B.C. residents and four companies
illegally distributed the securities of two health drink producers.
The Executive Director issues temporary orders in situations where the
length of time required to hold a hearing could be prejudicial to the
public interest. The temporary order prohibits SPYru Inc., Paradox
Distributors (1992) Ltd., Echo Partners Ltd., U-GO Brands Nutritional
Products Inc., Peter David Harris, Lorne Neil Cire, Christopher Andrew
Burke, Millard Michael Kwasnek, and Joseph Yvan JeanClaude Thibert
(a.k.a. John Thibert) from participating in B.C.'s capital markets
until a hearing is held.
The notice alleges that SPYru was a company incorporated in the Turks
and Caicos in October 2010. SPYru purported to raise money to develop a
health drink based on Spirulina. Harris, Cire, Klaus Guenther Glusing
and his son, Mark Klaus Glusing, were directors of SPYru at various
times. The Glusings are both deceased.
BSCS staff maintains that between January 2010 and April 2013, Harris,
Cire, Burke, Kwasnek and Thibert (collectively, the Sales Group) raised
$1,790,850 from 343 investors for SPYru through Paradox. Paradox is a
B.C. company for which Cire is the sole director and officer. Cire
received approximately $246,127.64 and Harris received approximately
$190,665.04 in commissions, while Kwasnek, Burke, and Thibert received
shares of SPYru as compensation.
Commission staff determined that most of SPYru's investors did not
qualify for the registration and prospectus exemptions claimed by the
Sales Group after the commission investigation had begun. None of the
respondents have ever been registered to sell securities in B.C. or
filed a prospectus with the BCSC.
The notice alleges that Harris and Cire, acting on instructions from the
sent approximately $817,515.12 of investor money to various parties,
most of it to the Glusings in the Turks and Caicos;
did not know how the money would be used;
continued sending funds despite Klaus Glusing's refusal to provide
explanations for the transfers and even after they suspected Klaus
Glusing was not using the money to develop the health drink;
avoided using the banking system to stop questions from the banks
concerning money laundering.
Most of the $817,515.12 is unaccounted for, and Harris and Cire can only
produce records of transfers totaling $419,724.16.
The notice states that in early 2013, Harris and Cire terminated their
working arrangement with SPYru and Klaus Glusing. The Sales Group
formed Echo and U-Go and began raising money for another health drink
Since February 18, 2013, the Sales Group, through U-Go, has raised
$898,340.10 from 111 investments. Several of the investors for whom
U-Go filed exempt distribution reports did not qualify for any
exemptions. Members of the Sales Group received commissions for their
BCSC staff contends that by selling SPYru and U-Go securities without
being registered or having filed a prospectus, and by providing false
information in exempt distribution reports filed with the BCSC, the
respondents breached securities laws.
Since January 29, 2014, the respondents have refused to cooperate with
commission staff and indicated that they may raise further funds from
investors. In the notice, BCSC staff alleges that the respondents
present an ongoing risk to the securities markets due to their reckless
handling of investor money.
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 February 19, 2014 at 10:00am.
You may view the temporary order and notice of hearing on our website www.bcsc.bc.ca by typing SPYru Inc., Paradox Distributors (1992) Ltd., Echo Partners
Ltd., U-GO Brands Nutritional Products Inc., Peter David Harris, Lorne
Neil Cire, Christopher Andrew Burke, Millard Michael Kwasnek, Joseph
Yvan JeanClaude Thibert, or 2014 BCSECCOM 53 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
A securities market that is fair and warrants public confidence
A dynamic and competitive securities industry that provides investment
opportunities and access to capital
SOURCE: British Columbia Securities Commission
For further information:
Richard Gilhooley, Media Relations
604-899-6854 or 1-800-373-6393 (toll free)
Learn how to protect yourself and become a more informed investor at www.investright.org