BCSC panel finds that tech company and two Vancouver men illegally distributed securities

VANCOUVER, Aug. 31, 2015 /CNW/ - A British Columbia Securities Commission (BCSC) panel has found that HRG Healthcare Resource Group Inc., Alexander Downie, and Daniel G. Mohan illegally distributed securities. Downie was a director and founder of HRG, and Mohan was a director and chief executive officer of HRG. Neither has ever been registered to sell securities in B.C.

HRG was in the business of developing and commercializing a web-based, bedside medical records and entertainment system for patients in hospitals. The panel found that the company breached securities laws concerning prospectus requirements when it distributed approximately $4 million in securities to 109 investors. Downie and Mohan were also found to have breached securities laws concerning prospectus requirements, Downie with respect to distributions to 22 investors for a total of $693,500, and Mohan with respect to distributions to 34 investors for a total of $1,709,850.

The panel also found that Downie and Mohan are liable for all of HRG's illegal distributions. Downie is liable for the full $4 million raised, while Mohan is liable for $3.48 million raised (Mohan's liability was limited to the distributions that took place during the time he was a director and senior officer of the company). HRG was also found liable for ten Exempt Distribution Reports (EDRs) filed with the BCSC that were proven to have contained false information.

Discussing the need to hold both Downie and Mohan liable for HRG's contraventions, the panel wrote:

Downie was the founder of HRG. Mohan was the Chief Executive Officer of HRG. Both were directors of the company. Both were actively involved in the capital raising activities of the corporation, including, soliciting potential investors, meeting with potential investors, executing subscription agreements and driving the commercial activities which created the need for capital raising and the manner in which invested funds were spent.

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.

You may view the findings decision on our website www.bcsc.bc.ca by typing HRG Healthcare Resource Group Inc., Alexander Downie, Daniel G. Mohan, or 2015 BCSECCOM 326 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

 

SOURCE British Columbia Securities Commission

For further information: Media Contact: Richard Gilhooley, Media Relations, 604-899-6713, mediarelations@bcsc.bc.ca; Public inquiries: 604-899-6854 or 1-800-373-6393 (toll free), inquiries@bcsc.bc.ca; Learn how to protect yourself and become a more informed investor at www.investright.org

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http://www.bcsc.bc.ca

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