The British Columbia Securities Commission (BCSC) is alleging that four Lower Mainland residents, including three from North Shore, and six B.C. companies connected to them took part in a $50 million scheme that was contrary to the public interest.
In an Amended Notice of Hearing, the BCSC also alleges that some of them committed insider trading and one of them failed to file reports required by securities laws.
The respondents are West Vancouver residents Justin Edgar Liu and Anthony Kevin Jackson, North Vancouver resident Cameron Robert Paddock and Vancouver resident Robert John Lawrence, plus six companies where they acted as directors.
Liu was the director of Lukor Capital Corp. and Asiatic Management Consultants Ltd.
Jackson was the director of BridgeMark Financial Corp. and Jackson & Company Professional Corp, while Paddock was the director Rockshore Advisors Ltd.
Lawrence was the director of Tavistock Capital Corp.
Between February and August 2018, the respondents allegedly took part in a scheme involving nine issuers that raised $50.8 million through 12 private placements.
The issuers kept only a small portion of those funds. They paid most of the remaining funds to consultants as prepaid consultant fees, despite the fact that little or no consulting work was done to warrant those fees.
Some of the consultants purchased shares of the issuers through a consultant exemption, so as a result, they could sell them immediately without a hold period.
The BCSC alleges that by participating in this scheme, Liu, Lukor, Asiatic, Jackson, BridgeMark, Jackson & Company, Paddock, Rockshore, Lawrence and Tavistock acted contrary to the public interest.
In addition, Liu, Jackson and Paddock bought or sold their shares with the knowledge that the issuers kept only a small portion of the funds they raised, a material fact or change that wasn’t disclosed to the public.
By doing so, the BCSC alleges that they committed insider trading.
The BCSC also alleges that four respondent companies – Lukor, BridgeMark, Tavistock and Rockshore – did so as well.
The BCSC also alleges that Liu did not file any insider reports for buying or selling shares of two issuers as required by the Securities Act and National Instrument 55-104, Insider Reporting Requirements and Exemptions.
The BCSC’s allegations have not been proven. The commission will schedule a hearing date in July 14, 2021.