Two Vancouver men are facing hefty fines and market bans after the B.C. Securities Commission found they had engaged in market manipulation in a company that billed itself as the "next Apple."
A BCSC panel has imposed multimillion-dollar penalties on Raffi Khorchidian and Garo Aram Deyrmenjian and banned the men from holding any position as a director or officer.
The pair is alleged to have permitted the transfer of hundreds of thousands of dollars to fund the marketing campaign of a Nevada company called Kunekt in 2011.
Kunekt had announced plans to enter the smartphone market, and in its newsletters called itself the "next Apple" even though it had no proprietary technology and only had roughly $360,000 in assets.
"There was no basis for the tout sheet materials to claim that Kunekt…was the 'next Apple,' that its shares would soon be worth $52.92 or that there was an 'all-but-guaranteed' chance to garner 5,192% profits before the summer of 2011," the panel noted in a 2018 release.
The panel claims the newsletter and marketing campaign helped the company reach a market cap of almost $180 million.
Khorchidian and Deyrmenjian have been ordered to pay $7.15 million and $7.14 million, representing the net proceeds the pair received from trading in Kunekt shares.
Khorchidian will also have to pay an administrative penalty of $850,000 and Deyrmenjian will have to pay a penalty of $700,000.
The panel also imposed bans and fines on a third man, David Craven, and the Swiss wealth management firm he worked for, EHT Corporate Services S.A.
