Thursday 21st June 2018

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Posts tagged ‘B.C. Securities Commission’

B.C. Securities Commission executive director Peter Brady says the agency’s proposed fee hikes would spur enforcement

May 31st, 2018

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Have your say on the BCSC’s proposed fee hikes

May 1st, 2018

by Greg Klein | May 1, 2018

Some hefty cost increases now seem likely for British Columbia’s investment industry, but the B.C. Securities Commission’s giving participants a chance to comment. These would be the first such raises since 1994, according to the agency, which says it “funds its operations entirely from fees paid by market participants and receives no government or taxpayer funding.” Written comments will be accepted up to May 31.

“People need to have confidence that securities markets are being regulated appropriately,” said executive director Peter Brady. “With increased funding, the BCSC can expand its work on critical regulatory priorities, including hiring significantly more criminal investigators.”

Late last year a series of articles by Postmedia journalist Gordon Hoekstra slammed the commission for lax enforcement against serial scammers and others with unpaid fines but substantial assets. The BCSC has a staff of 234 and a budget of $46.6 million, Hoekstra reported.

Apart from beefing up enforcement and fine collection, a bigger budget would help address “regulatory challenges” including new marketplaces, rapid fintech innovation, increased cyber risk, increased private market capital raising and over-the-counter derivatives regulation, the BCSC stated.

Possibly reflecting a newly found frugality, the BCSC got through this year’s Fraud Awareness Month without producing a music video, as the agency did in 2017 and 2016.

Click here to see BCSC staff salaries for fiscal year 2014 to 2015.

Pamela McDonald of the B.C. Securities Commission warns that some sales pitches are too good to be true

April 3rd, 2018

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Fraud Awareness Month begins amid criticism of lax enforcement against serial scammers

March 7th, 2018

by Greg Klein | March 7, 2018

Education more than deterrence seems to be the focus of Canadian securities commissions as Fraud Awareness Month begins. Two series of articles by Postmedia and the Globe and Mail reveal numerous examples of con artists evading administrative penalties and criminal charges, leaving victims powerless to recover losses.

Fraud Awareness Month begins amid criticism of lax enforcement against serial scammers

The British Columbia Securities Commission kicked off the annual awareness campaign by releasing results of a survey. The people most susceptible to investment scams, the poll found, are millennials. Over 500 respondents were tested on their reaction to a fictional investment offer that guaranteed no-risk returns of 14% to 25%.

“Although the claim contains several investment fraud warning signs, 26% of respondents said the offer was ‘worth looking into,’” the BCSC reported. “More troubling, 20% of the respondents who would look into the offer said they were interested because they need the money, indicating even greater vulnerability.”

Adults aged 18 to 34 showed the greatest naiveté, with 47% of women and 35% of men that age expressing interest. Just 13% of people 55 years and over gave similar answers, a decline from 26% in a similar 2012 study.

“Investors should always be skeptical of anyone offering a risk-free investment with an unusually high return, because there’s no such thing,” warned BCSC director of communications and education Pamela McDonald. “We encourage investors to look carefully at every investment they make, but also to listen to your gut. If something doesn’t make sense, or doesn’t feel right, we encourage you to contact the BCSC.”

The admonition follows criticism of weak enforcement by the BCSC and its counterparts. In December the Globe and Mail’s Grant Robertson and Tom Cardoso reported their analysis of 30 years of regulatory records, finding one in nine people pronounced guilty of securities fraud go on to re-offend, some even defying multiple lifetime trading bans through aliases and “jurisdiction-hopping.” Ill-gotten gains can far exceed penalties, which at any rate often remain unenforced.

In November a Postmedia series by Gordon Hoekstra reported numerous cases of uncollected BCSC fines and payback orders on scammers who in some cases continue to hold significant assets. Others transfer assets with relative ease.

Between the fiscal years ending in 2008 and 2017, Hoekstra stated, the BCSC collected less than 2% of $510 million in fines and payback orders. The Ontario Securities Commission did somewhat better, collecting 18% over the last decade.

In a December response to the Globe and Mail, the Canadian Securities Administrators stated that securities commissions are limited to pursuing administrative cases, with police responsible for criminal matters. But last month Hoekstra reported examples of Vancouver police and RCMP refusing to investigate fraud allegations. Vancouver cops say they typically refer cases of investment fraud to the BCSC. The RCMP declined to investigate another example on the grounds that it was a BCSC matter.

In another February story, Hoekstra revealed the BCSC “quietly” stayed more than $35 million of penalties regarding nine cases following a B.C. Court of Appeal decision on a pump-and-dump operation.

B.C. Securities Commission under fire as half a billion in penalties remains unenforced

November 21st, 2017

by Greg Klein | November 21, 2017

Although some small cap companies seem to consider regulators the bane of their existence, big-time scammers might take a more benign view. A Postmedia investigation has revealed that the British Columbia Securities Commission—with 234 staffers and a $46.6-million budget—has collected less than 2% of $510 million in fines and payback orders issued over the last decade. The collection rate manages to fall even farther, to less than 0.1%, for 29 such orders of $1 million or more that total $458 million.

B.C. Securities Commission under fire as half a billion in penalties remains unenforced

Although the BCSC responds that the con artists may have hidden their assets or disappeared, journalist Gordon Hoekstra reports, “Postmedia tracked down $31 million in potential assets linked to the fraudsters,” including homes in affluent B.C. suburbs, Las Vegas and Hawaii.

Among available enforcement strategies, the BCSC “can file any of its decisions in B.C. Supreme Court, a simple administrative exercise, which automatically makes the penalties an order of the court,” Hoekstra points out. “If a property has been transferred to someone else, for example, a spouse, to escape a penalty, that may also be considered fraud.”

Regulators in other provinces do somewhat better, according to the study. Securities commissions in Ontario and Alberta achieved 18% collection rates over the last decade, while Quebec reached about 20% over the past four years. The U.S. Securities and Exchange Commission hit nearly 60% during the past five years.

The exposé seems to have taken both of B.C.’s main political parties by surprise. In a written statement NDP Finance Minister Carole James noted the commission operates at arms-length from the government. “We would encourage any proposals from the BCSC on any new mechanisms they may need to collect the fines,” she stated.

“No details were released by James, who ministry officials said was unavailable for an interview, on how the provincial government would follow up or monitor any proposals,” Hoekstra added.

As for the opposition party that had been government during most of the 10-year period, the BC Liberals “said in an e-mail that ‘unfortunately’ no MLAs were available for comment. The Liberals have 41 sitting MLAs, including two finance critics, Shirley Bond and Tracy Redies.”

The B.C. Securities Commission warns investors about an entity calling itself the Vancouver Stock Exchange Corp

August 23rd, 2017

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About time: BCSC warns investors of “Vancouver Stock Exchange”

July 20th, 2017

by Greg Klein | July 20, 2017

Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange

Better late than never, a warning sign
stands guard outside the former VSE building.

Whether inspired by a death wish or sheer audacity, an alleged scam has been named after the reputed scam capital of the world. On July 19 the British Columbia Securities Commission warned investors that a company called Vancouver Stock Exchange Corp “appears to have been issuing stock exchange listings to companies in China and B.C…. VSEC holds itself out as being the old Vancouver Stock Exchange (VSE). In fact, the VSE no longer exists.”

Moreover the new entity has no authorization to operate as an exchange in B.C.

The VSE merged with the Alberta exchange in 1999 to form the Calgary-based Canadian Venture Exchange, which was taken over in 2001 by the TMX Group’s (TSX:X) predecessor. But according to the commission, “VSEC claims that, in June of 2016, the old Vancouver Stock Exchange was reinstated as an independent exchange.”

VSEC’s Chinese-language website “identifies the companies that it purports to have approved for listing and capital raising,” the BCSC added. Anyone with info about VSEC is asked to contact BCSC Inquiries at 604-899-6854, 1-800-373-6393 or

On April 1, 2016, spoofed that a group of stock promoters planned to re-open the infamous VSE. See other April 1 stories:

B.C. Securities Commission executive director Paul Bourque promotes the BeFraudAware campaign

April 6th, 2016

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Pamela McDonald discusses the B.C. Securities Commission’s fraud-awareness musical

April 4th, 2016

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The VSE reborn

April 1st, 2016

Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange

by Greg Klein

Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange

Will the Vancouver Stock Exchange restore this city’s faded lustre?


Hedley Beauford’s not a man to mince words. And he speaks for many others. “The TSX Venture Exchange isn’t just broken,” he declares. “It’s unfixable. It’s time to go back to our roots and start all over again.”

We’re seated in Beauford’s office, newly remodelled but with walls displaying reminders of the past. Beauford proudly points to stock certificates from long-forgotten companies, portraits of colourful Howe Street characters, photos of frenzied trading floor activity and other mementoes of the former Vancouver Stock Exchange that was housed in this very building. As tradespeople and new staff bustle about with last-minute preparations, Beauford explains why he’s re-opening the fabled bourse.

Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange

Built just in time for the 1929 crash, the Vancouver
Stock Exchange building gets a 21st-century retrofit.

It was here that deals were done and money was raised for some of mining’s greatest events, he says. Pyramid, Dynasty, Eskay, Stikine, Afton, Gibraltar, Hemlo, Ekati, Voisey’s, Diavik—the names speak of grit, determination and above all success. It was here that great companies and great discoveries were made possible and here that venture capital will restore itself, Beauford maintains.

Only in Vancouver can the sector correct the catastrophe that began with the VSE’s 1999 merger into a Calgary-based exchange, and the devastation that continued as mining juniors found themselves shunted onto the TSXV. Along the way came a punishing regimen of rules and regulations that nearly killed Canadian venture capitalism, Beauford contends.

That regimen hasn’t done much for Toronto either. Both the TSX and TSXV experience an ongoing decline in listings, financings and total market cap. The Venture in particular has been walloped in trading volume and value. The TMX Group’s own stock (TSX:X) spent most of 2016 trading at five-year lows. Attempts to revitalize the Venture from within, meanwhile, have provoked outright scorn from critics who see no end to excessive fees and regulations.

There have been glimmers of hope elsewhere. Revamped by Ned Goodman, the Canadian Securities Exchange reported record volume last year along with a 20% increase in listings. Last week newcomer Aequitas Neo marked its first year of operation. But even these efforts face impending doom through over-regulation, Beauford argues. The only solution he sees is a return to the VSE, once considered the greatest venture capital market in the world.

Yet the VSE had another reputation too—the scam capital of the world. But say that to Beauford and you’ll experience his 120-decibel, nine-Richter-scale apoplectic rage.

“Outrageous!” he bellows, veins throbbing on his forehead. “Vicious exaggeration! Anyone who’d call Vancouver the scam capital of the world doesn’t know the scam capitals of the world like I know the scam capitals of the world.”

Juniors, brokers, promoters desert Toronto to revive the Vancouver Stock Exchange

BCSC officials “had no right to put up
that stupid sign,” Beauford insists.

Still that rep, whether overstated or not, dates back to a time when the VSE faced little if any oversight. Now critics say the pendulum has swung to the opposite extreme. According to their argument, re-opening the VSE would solve nothing if the sector continues to be stymied by the Investment Industry Regulatory Organization of Canada and the British Columbia Securities Commission.

Or, as Beauford prefers to call them, “those capital-depleting, blood-sucking, anal-retentive power-trippers.”

But his countenance relaxes as he explains that IIROC and the BCSC will have no jurisdiction here. For that, Beauford credits a very Canadian turn of events.

“Anyone who’s followed Vancouver real estate these past years knew it was only a matter of time before Chinese state-owned companies got involved. That’s finally played out to its logical conclusion. Vancouver now comes under Chinese sovereignty. Beijing will make its official proclamation next week to coincide with Canada’s next formal apology. We anticipate excellent relations with our new oversight agencies—if there are any.”

Freed from those shackles, he looks forward to reliving “the excitement that comes when you send a stock soaring to the heavens with no logical means of support. Then, just before the punters catch on, the delight in crashing it to earth. To me, that’s venture capitalism. And no place can revive it like Vancouver.”

But no matter how laissez-faire, a market can’t overcome lousy commodity prices. Doesn’t Beauford have other concerns besides over-regulation?

“Oh, we won’t be limited to resource stocks,” he answers. “That brings to mind what I’ve always thought of as a conflict of interest in Toronto, where the TMX Group trades its own stock on its own exchange. So once Vancouver’s officially separated from Canada, the VSE will be the perfect venue for a fairly big up-and-coming listing.

“For years Canada’s been pleading with the world to buy us, buy our land, buy our companies, buy our resources,” he continues. “Soon foreigners will be able to buy our country share by share, and this time even Canadians can participate. We expect Canada Corp to make its VSE trading debut exactly 12 months from today, when the country begins its next fiscal year on April 1, 2017.”

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Mining company inspires Canadian political reform.