VANCOUVER, Jan. 21, 2013 /CNW/ - The executive director of the British
Columbia Securities Commission has issued a notice of hearing alleging
that a Canadian citizen who currently resides and is under house arrest
in Colbert, Washington, perpetrated a fraud and made false statements
to the commission.
The notice alleges that Doris Elizabeth Nelson operated a payday loan
business that was, in actuality, a Ponzi scheme that raised $135.4
million from at least 800 investors in Canada and the United States.
The notice states that over $69 million was raised from at least 355
Nelson ran her business through a group of companies that she directed
and controlled, and which she represented and promoted collectively as
the Little Loan Shoppe. She financed the growth of her business by
raising funds from investors in B.C. and the U.S., and used existing
investors to recruit new investors, paying these recruiters on a
commission basis. In return for investors' money, she had her companies
issue promissory notes.
Nelson represented to investors, both directly and through her
recruiters, that because her business was so profitable, she could
afford promissory notes paying annual interest rates of 40% to 60%.
She also said that the investment was risk-free. In reality, her
business was not profitable due to its high rate of customer loan
One of the companies that Nelson controlled and used to issue promissory
notes was 0738126 B.C. Ltd. On July 11, 2008, commission investigators
notified Nelson that 0738126's capital raising activities in B.C. were
under investigation. The notice alleges that Nelson reacted by emailing
investors, telling them that she planned to make false statements to
the commission and coaching them to hide relevant information if
contacted by the commission.
The commission ordered 0738126 to provide information and records
regarding its investors. In response, Nelson produced a false
affidavit in which she misrepresented the number of Canadian investors
and attached false evidence purporting to establish exemptions for
those distributions that 0738126 had already made. Nelson also stated,
correctly, that 0738126 had ceased distributing securities.
Since 2009, two of Nelson's companies have entered bankruptcy
proceedings. Nelson is also the subject of civil proceedings brought by
the Washington State Department of Financial Institutions and the U.S.
Securities and Exchange Commission. Additionally, she is awaiting trial
in federal criminal court in Spokane, Washington, currently scheduled
to be held in June 2013, on 71 counts of wire fraud, 22 counts of mail
fraud, and 17 counts of international money laundering.
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, 2013 at 9:00am.
The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the
province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Doris Elizabeth Nelson, Little Loan Shoppe or 2013 BCSECCOM 8
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).
For media inquiries, contact Richard Gilhooley, media relations,
604-899-6713. For public inquiries, call 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
SOURCE: British Columbia Securities Commission
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