B.C. man who convinced couples to invest in fake Magic Johnson speaking event gets lifetime market ban

The B.C. Securities Commission logo in an undated file photo.

A convicted Vancouver fraudster who convinced couples to invest in a fake event that purported to have basketball legend Magic Johnson as a speaker has been banned for life from participating in the investment market.

Jeffrey Shaughnessy pleaded guilty in 2022 to the offence of "obtaining credit by false pretence or fraud." 

He received a three-month conditional sentence and was ordered to pay back the $29,000 he had fraudulently obtained from the scheme.

A panel of the B.C. Securities Commission decided this week that it would impose a permanent financial markets ban on Shaughnessy, finding him "unfit to participate" in such markets.

The lengthy delay between Shaughnessy's guilty plea and his market ban from the BCSC appears to be at least partially the result of the commission's inability to find him.

According to the panel's sanctions decision, the BCSC's executive director sent documents to Shaughnessy at two different addresses to notify him of the BCSC's application to ban him from the marketplace. Both mailings were returned to the sender, and Shaughnessy did not participate in the hearing about his case. 

The executive director applied to the panel seeking additional time to track Shaughnessy down and ensure he received notice of the application, but the panel denied that request, finding that the obligation to notify Shaughnessy had been met by mailing the documents to his last known address.

Shaughnessy's 2022 conviction stemmed from actions he took in 2017. According to the sanctions decision, he convinced two couples to invest in purported efforts to organize an event that would feature Magic Johnson as a speaker and take place in May 2018.

There is no indication in the decision that Johnson was involved in or aware of the fake event.

"Shaughnessy presented the couples with materials related to the proposed event, and the couples invested funds to be used for the event," the decision reads. "Shaughnessy told the couples that they would receive increased returns on their investments and that, if the event did not work out, Shaughnessy would give their investments back."

In fact, the company that Shaughnessy presented as organizing the event had already ceased operation at the time he requested the investments.

One of the couples provided $10,000 and the other provided $19,000. Shaughnessy used the funds for his own purposes, including at a casino, the decision notes.

Though his guilty plea was considered a mitigating factor in the case, Shaughnessy's misconduct was "extremely serious," the panel concluded in its decision.

"He orchestrated a scheme to defraud the investors and used the investors’ money for his personal gain," the decision reads. "By doing so, he demonstrated that he is dishonest and untrustworthy and therefore unfit to be a registrant, director or officer in the capital markets."

The permanent ban prohibits Shaughnessy from serving in any of those roles, as well as from engaging in promotional activities related to the markets. He may only invest his own money through a registered dealer, and only in his personal registered accounts.