VANCOUVER, Aug. 1, 2018 /CNW/ - In a settlement agreement with the British Columbia Securities Commission (BCSC), Larry Lee has admitted to perpetrating a fraud.
Lee was engaged in the business of developing real estate websites from 2010 to 2013.
In the settlement agreement, Lee admits that he raised $200,000 from two joint investors under a promissory note on May 11, 2012. Lee represented to the investors that he would use their funds to develop his business and that he could sell his business for at least $10 million by December 31, 2014. He told the investors that this was a low-risk investment, with guaranteed repayment of the principal and 24% annual return over two years. Lee represented that he owned his house and, if necessary, would sell it in order to repay the investors and that his estate would repay the investors if he passed away during the term of the promissory note.
However, Lee omitted to tell the investors that his business had no revenue and minimal assets, he had no basis to guarantee a 24% rate of return, he only owned a 20% interest in the house, and that, at the time of the investment, he was approximately $800,000 in debt.
On May 11, 2012, Lee deposited the investment into his personal bank account and immediately used the funds to pay friends, family, credit card debt, and bank loans. Lee's business never generated any revenue and he abandoned it at the end of 2013. Lee has voluntarily repaid $10,000 to the investors, and cooperated with the Executive Director.
Lee agreed to disgorge $190,000 to the Commission as part of the settlement, as well as undertake to pay the Commission $50,000. He has been ordered to resign any position he holds as a director or officer of any issuer or registrant.
Les is also banned from trading in or purchasing any securities or exchange contracts (with limited exceptions); relying on any of the exemptions set out in the Securities Act, the regulations or a decision; becoming or acting as a director or officer of any issuer or registrant; becoming or acting as a registrant or promoter; acting in a management or consultative capacity in connection with activities in the securities market; and engaging in investor relations activity.
You may view the settlement agreement on our website, www.bcsc.bc.ca, by typing Larry Lee or 2018 BCSECCOM 221 in the search box. Information about disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' (CSA) Disciplined List for information relating to persons and companies disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (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
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission
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