VANCOUVER, Oct. 10 /CNW/ - The British Columbia Securities Commission has
reached a settlement with a former stock picker and his company that
permanently bans him from the province's capital markets, and includes a
Supreme Court order that enables investors to seek to recoup their losses.
In the settlement agreement, Albert Stephen Budai, a former B.C.
resident, admitted to defrauding investors. Budai and StockDepot Information
Services Corp. also admitted to illegal trading and distribution of securities
as well as making misrepresentations to investors.
Between December 2001 and January 2004, StockDepot and Budai, the
company's majority stockholder and president, raised approximately
$1.4 million by issuing company shares to 49 investors - 25 in B.C. - without
registration or filing a prospectus.
Budai admitted he committed fraud through a practice called "scalping" in
which he bought and then sold the rising shares of companies he profiled in
subscription-based publications and on a radio talk show. Budai did not tell
his readers or radio show listeners that he was going to sell, or had sold,
his shares after profiling the companies.
He also admitted he committed fraud when he bought Internet domain names
that he then sold to StockDepot at inflated prices without disclosing to
investors that he received monies from the sale.
Under the settlement agreement, Budai and StockDepot are permanently
banned, with exceptions, from trading or purchasing securities. Budai is also
permanently prohibited from acting as a director or officer of any issuer,
except a private issuer in which he or his immediate family members are the
sole shareholders, and he cannot engage in investor relations activities in
The executive director did not assess a $250,000 fine in the public
interest against Budai because he has provided satisfactory evidence that he
cannot pay the penalty. However, Budai and StockDepot consented to an order
from the Supreme Court of British Columbia, sought by the BCSC, that may help
investors partially recoup their losses without having to pursue expensive and
time-consuming civil litigation on their own.
The Court order, granted on October 9, 2007, requires StockDepot to give
to the BCSC all profits from the sale of its domain names. Under the
Securities Act, when money is collected, the BCSC will notify the public who
can then make a claim through the Court for their losses.
The Court also cancelled Budai's shares in StockDepot, ordered StockDepot
to repay investors all the money collected from the purchase of its
securities, and ordered Budai to compensate or make restitution to investors.
The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You may view the settlement on our website www.bcsc.bc.ca by typing in the
search box, Albert Stephen Budai or StockDepot Information Services Corp., or
2007 BCSECCOM 610. If you have questions, contact Ken Gracey, Media Relations,
Learn how to avoid investment fraud at the BCSC's investor education
Backgrounder - Section 15.1
The BC Securities Act, Securities Regulation, and Securities Rules, as
well as notices, instruments, and policy documents, regulate trading in
securities and exchange contracts within British Columbia. The government of
British Columbia introduced Section 15.1 to the Act, which came into effect on
May 18, 2006.
Claim for wrongful benefit
15.1 (1) The commission must notify the public in accordance with the
regulations if the commission receives money from an order made under
section 155.1 (b) or 157 (1) (b).
(2) A person that makes a claim to money held by the commission under
this section must file the claim in the Supreme Court within 3 years
from the date of the first notification made under subsection (1) and
file a copy of the claim with the commission.
(3) If the commission receives a copy of a claim under subsection (2),
it must pay into court all of the money the commission receives from an
order made under section 155.1 (b) or 157 (1) (b).
(4) If the commission has paid money into court under subsection (3),
any money remaining after the court has adjudicated all claims made
under subsection (2) in relation to the money must be paid to the
(5) After 3 years from the date of the first notification made under
subsection (1), the commission may retain any money not claimed under
For further information:
For further information: Ken Gracey, (604) 899-6577, or (B.C. & Alberta)