BCSC panel orders man to pay more than $440,000 in penalties

    VANCOUVER, Oct. 27 /CNW/ - A British Columbia Securities Commission panel
has ordered a B.C. man who committed fraud to pay a fine, permanently cease
trading and purchasing securities, and pay back investors' money he used for
personal gain.
    The BCSC panel found that Ralph Kelly, a Parksville resident and the
former president of Virtual Community Exhibitions Inc. (VCE), committed a
fraud when he deceived B.C. investors into buying VCE shares and then
deliberately converted more than 50 per cent of the money for his own use.
    "Kelly perpetrated a fraud on the investors. He deprived the investors of
their funds by converting $242,153.60 to his own personal uses," the panel
said in its decision. "We have found that Kelly knew he was making
misrepresentations. His statements to prospective investors and the
promotional materials he participated in preparing, approved and distributed
to investors were a tissue of outright lies."
    In its decision, the panel ordered that Kelly be permanently prohibited
from trading or purchasing securities in B.C., that Kelly pay a $200,000
administrative penalty, and that Kelly disgorge for the benefit of the
investors his ill-gotten gains of $242,153.60.
    Between May 2001 and June 2003, Kelly promoted, offered and sold $418,000
worth of shares of VCE to 58 B.C. investors.
    In promotional materials and direct discussions with investors, Kelly
stated that VCE and its affiliated companies would create an on-line tradeshow
and an advertising website with product purchasing and delivery features.
Kelly presented materials to investors that projected revenues of $38 million
based on 35 virtual exhibition events scheduled between March 2002 and March
2003. These were all lies.
    Kelly also represented to investors that VCE would buy back their shares,
at their option, one year from the date of purchase at a 20 per cent premium.
At the panel hearing, investors testified the repurchase agreement was the
most important factor in their decision to invest.
    In the end, VCE did not buy back the shares and B.C. investors lost their
    The notice of hearing against VCE and Kelly also named Raymond Patrick
Shaw as a respondent. In August 2007, the commission issued an order against
Shaw (2007 BCSECCOM 500) and the executive director discontinued the
proceedings against him.

    The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You may view the decision on our website www.bcsc.bc.ca by typing in the
search box, Ralph Kelly or 2008 BCSECCOM 560. If you have questions, contact
Ken Gracey, Media Relations, 604-899-6577.

    Learn how to avoid investment fraud at the BCSC's investor education
website: www.investright.org.

For further information:

For further information: Ken Gracey, (604) 899-6577 or (B.C. & Alberta)

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