VANCOUVER, Nov. 12, 2015 /CNW/ - The Executive Director of the British Columbia Securities Commission (BCSC) has issued a notice of hearing alleging that a property developer and sole director of a B.C. company defrauded an investor.
The notice alleges that Brendan James Schouw, a B.C. resident and the sole director of Hornby Residences Ltd., solicited an investment of $1,000,000 from an investor. Schouw provided the investor with an investment certificate, signed by Schouw as President and Director of Hornby Residences Ltd. Among other things, the certificate stated that the investment would garner an 18% per year return, and Hornby Residences Ltd. guaranteed repayment of both the principal investment and the interest.
BCSC staff maintains that Schouw told the investor that his funds would be used for building permits, demolition and construction costs of the Artemisia, a project on Hornby Street in Vancouver for which Schouw had incorporated Hornby Residences Ltd. Schouw advised that once the project was complete, the investor could have his investment and interest paid out, or he could choose to use it as a credit towards the purchase of a suite in the Artemisia, or another of Schouw's developments.
Additionally, the notice alleges that upon receiving the investor's funds, Schouw transferred approximately 75% of the money to other accounts under his control. Within a month-and-a-half of receiving the investor's funds, Schouw spent approximately $453,155.00 of the investor's funds on expenses unrelated to the development of the Artemisia, including a payment towards a personal legal judgment, payments to previous investors, and to service personal mortgage and rental obligations.
Schouw did not develop the Artemisia. A bankruptcy order was made against Hornby Residences Ltd. in April 2015. The investor has not received any interest or principle repayments from Schouw or Hornby Residences Ltd., and the investor's funds are gone.
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 December 8, 2015 at 9:00am.
You may view the notice of hearing on our website, www.bcsc.bc.ca, by typing Brendan James Schouw, Hornby Residences Ltd., or 2015 BCSECCOM 406 in the search box. You can find information about disciplinary proceedings 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
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