VANCOUVER, Aug. 22, 2012 /CNW/ - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a non-reporting B.C. issuer and three B.C. residents engaged in illegal distributions, and that one of them made prohibited statements.
The notice alleges that Cinnabar Explorations Inc, a mining company that purported to own a gold and copper property in Idaho, raised $45,000 from 13 investors between April and July of 2011. Cinnabar has never filed a prospectus in B.C.
Christopher James G. Bass, Daniel Grant McGee and Dale Zucchet, all of whom are B.C. residents, are also named in the notice. Bass was the Chief Executive Officer and a director of Cinnabar until his resignation on October 4, 2011. He was registered as an investment advisor from 1986 to 1987, and was previously sanctioned by the BCSC in 1988.
McGee is a director of Cinnabar, and Zucchet solicited investors on behalf of the company.
The notice says that Cinnabar filed exempt distribution reports with the BCSC concerning the distribution. Commission staff contend that seven of the 13 investors did not qualify for the Family, Friend and Business Associates and Accredited Investor exemptions relied upon by Cinnabar.
On July 21, 2011, the Corporate Finance division of the BCSC cease-traded the securities of Cinnabar.
In addition to the illegal distribution, commission staff is alleging that Zucchet made materially false or misleading statements to a commission investigator concerning Cinnabar's plan to go public, and the legality of purchasing shares under an exemption for which the investigator said he did not qualify.
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 September 18, 2012 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 Cinnabar Exploration Inc, Christopher James G. Bass, Daniel Grant McGee, Dale Zucchet or 2012 BCSECCOM 336 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).
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE: British Columbia Securities Commission
For further information:
For media inquiries, please contact Richard Gilhooley, media relations, 604-899-6713.For public inquiries, please call 604 899 6854 or 1 800 373 6393 (toll free).