VANCOUVER, Sept. 16, 2014 /CNW/ - A British Columbia Securities Commission panel has found that two real estate developers engaged in an illegal distribution of securities. One of them, a former mutual fund salesperson, was also found to have committed fraud and to have breached a BCSC order prohibiting him from engaging in certain conduct in B.C.'s capital markets.
The panel found that between October 2006 and August 2010, Michael Jerome Knight, Jeffrey Karl Wiegel, 0772835 B.C. Ltd., Local 1661 Building Inc. and Almaval Building Inc. sold securities without a prospectus and without being registered. The panel determined that the respondents:
- Illegally raised approximately $1.9 million by distributing securities of 0772835 B.C. Ltd. to 31 B.C. residents;
- Illegally raised approximately $1.7 by distributing securities of Local 1661 Building Inc. to 19 people, the majority of whom were B.C. residents;
The panel also found that Knight, a mutual funds registrant between 1992 and 1994, breached an April 5, 2004 order prohibiting him from engaging in acts in furtherance of a trade and investor relation activities for a period of three years. Furthermore, the panel found that Knight committed fraud by falsely claiming that a promissory note on behalf of Almaval would become secured by a mortgage on land located at 3701 West Broadway, Vancouver. The panel dismissed fraud allegations against Wiegel, an officer and director of the four companies named as respondents.
Discussing the finding of fraud, the panel wrote, "Knight knew that Almaval did not own the property at 3701 West Broadway. We find that Knight had subjective knowledge of the prohibited act, being the failure to tell the investors that Almaval did not own the property."
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 Jeffrey Karl Wiegel, Michael Jerome Knight, Streamline Properties Inc., 0772835 B.C. Ltd., Local 1661 Building Inc., Almaval Building Inc., or 2014 BCSECCOM 263 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
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