Investors who lost $400K due to unregistered trader will get fraction back after settlement, BCSC says

Canadian cash is shown. (Shutterstock.com)

Investors who lost more than $400,000 as a result of a B.C. man's unregistered trading and advising will be getting some of their money back, a panel of the provincial securities regulator has ruled.

The investors gave Shijun "Clark" Zhu discretionary trading authority over their accounts, and he made trades with their money that "caused or contributed to the depletion of the funds," according to the B.C. Securities Commission.

The trades in question took place from 2016 to 2018. In 2021, Zhu admitted to unregistered trading and advising in a settlement agreement with the BCSC. 

In that settlement, Zhu was banned from participating in the financial markets – except as an investor in his own accounts – for 10 years. He also agreed to pay a $40,000 administrative penalty and was ordered to pay a $38,639.69 "disgorgement" of the money he made from commissions for the trades he made on behalf of the investors.

On Tuesday, a BCSC panel approved a plan to distribute those funds to the four investors who submitted claims for losses caused by Zhu's misconduct.

The investors are not named in the panel's decision, but are referred to by initials. They submitted claims for losses ranging from $67,150.94 to $133,536.48. Collectively, they claimed losses of $414,519.74.

The disgorgement amount is just 9.3 per cent of the investors' total losses, and the panel determined it should be distributed to the four investors on a prorated basis based on the amount of loss each one claimed.

The investors will receive amounts ranging from $6,259.51 to $12,447.68, with each one receiving approximately 9.3 per cent of the amount they claimed.