CALGARY, Sept. 12, 2019 /CNW/ - The Alberta Securities Commission (ASC) has concluded a Settlement Agreement and Undertaking with the Lutheran Church-Canada, the Alberta-British Columbia District (the District) and others in connection with a long-running investment program that collapsed into insolvency in early 2015. A Company Creditors Arrangement Act (CCAA) Monitor remains in place to distribute proceeds of the insolvency to investors pursuant to directions of the Court of Queen's Bench of Alberta.
In the Settlement Agreement, the parties admitted to breaching Alberta securities laws by making statements which they knew or ought to have known did not state all of the facts required. They acknowledged that certain information, which was not disclosed to investors, would reasonably be expected to have a significant effect on the market price or value of the investments. Investors were not told, for example, that most of their money was concentrated in loans to a proposed land development project that defaulted on principal payments for three years in a row, did not produce financial statements, had inadequate financial controls in place, and had insufficient assets to secure the loans. As a result, there was significantly higher risk of losing their money than investors were told when they made their investments.
The individual respondents: Donald Robert Schiemann, Kurtis Francis Robinson, James Theodore Kentel, Mark David Ruf and Harold Carl Schmidt, agreed to pay a total of $500,000 to the CCAA Monitor for distribution to investors in accordance with the Court's direction.
"The ASC is very pleased to facilitate recovery for investors through this settlement agreement," said David Linder, Executive Director at the ASC. "With a system for distribution in place through the CCAA Monitor, and with the Court's supervision, this settlement provides an opportunity to increase the amount available for distribution to harmed investors – many of whom are elderly – in a timely manner."
An additional $100,000 is payable to the ASC to cover a portion of its investigation and litigation costs. No settlement funds were paid by the corporate respondents, thus ensuring that any eligible corporate assets remain available for investor recovery through the CCAA proceedings.
The individual respondents also agreed to permanently refrain from:
- Trading in or purchasing securities or derivatives, or relying on exemptions in Alberta securities laws;
- Acting as an officer or director of an issuer, registrant, or investment fund manager;
- Acting as a registrant, investment fund manager or promoter;
- Advising in securities or exchange contracts; and
- Acting in a management or consultative capacity in connection with activities in the securities market.
The Settlement Agreement resolves the matters alleged in a Notice of Hearing issued June 27, 2018. As a result, the hearing into these allegations scheduled to commence on September 13, 2019 will not proceed.
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
SOURCE Alberta Securities Commission
For further information: For ASC Media Inquiries: Curt Boechler, Senior Communications Advisor, 403.835.1263; For Investor Inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488