Vancouver lawyer banned from financial markets for role in U.S. fraud
B.C.'s securities regulator has permanently banned a Vancouver lawyer from the financial markets after he was convicted in a U.S. court for his role in a US$34-million fraud.
In 2018, the U.S. Securities and Exchange Commission accused Faiyaz A. Dean of engaging in a "fraudulent scheme to effect illegal, unregistered sales of and manipulate the market" for shares of a company called Biozoom Inc., according to a sanctions decision issued by a panel of the B.C. Securities Commission on Wednesday.
Dean did not participate in the U.S. court proceedings, and a default judgment was entered against him in November 2019, according to the BCSC.
The U.S. court banned him from participating in "penny stock" offerings – defined as those with a price of less than US$5 per share. It also ordered him to pay a civil penalty of US$160,000 to the SEC.
The BCSC decision indicates that the commission's executive director sought to ban Dean from the markets under the commission's authority to reciprocate orders from other financial regulators.
Dean opposed the effort to sanction him, arguing that the U.S. court's default judgment against him meant there had been no findings of fact in the case and the panel therefore could not treat the SEC's allegations as factual.
The panel rejected this argument, writing in its decision:
"It is well-established under United States and Canadian law that a default judgment conclusively establishes the liability of a defendant and any allegations relating to liability are considered true. As a consequence of default, defendants are deemed to have admitted the allegations of the complaint. It is widely held that a court, when faced with a default judgment, is required to accept all of the factual allegations as true."
Dean also argued that his conduct "fell short of market manipulation" and was too tangential to the fraud to warrant sanctions against him, according to the decision.
This claim, too, was unpersuasive to the panel.
"Dean’s fraudulent market manipulation involved artificially high stock prices which were sold to unsuspecting investors who, consequently, suffered harm when the prices fell," the decision reads.
"Dean claims that his role in the fraudulent scheme was 'relatively minor.' He is wrong. He had an essential role in the market manipulation and, because of his actions, investors were harmed."
The panel noted that Dean received almost US$120,000 from his participation in the scheme, which he argued was "for services performed."
He told the panel that the allegations against him did not establish whether the amount he received was for "legitimate professional services," and argued that the panel shouldn't conclude that he was enriched by the fraud.
"Dean’s claim that the money he received from his part in a market manipulation is somehow legitimate is audacious," the panel wrote, rejecting his argument.
"We find that he was enriched."
The BCSC panel banned Dean from trading in or purchasing any securities, derivatives or registered accounts, with limited exceptions for personal accounts purchased through a registered dealer who has been provided with a copy of the decision against him.
It also banned him from serving as a director or officer of any securities issuer or registrant, serving as a registrant or promoter, advising or consulting in the markets, and engaging in promotional activities.
The decision notes that Dean resides in Vancouver and is a non-practicing lawyer in Vancouver. He is currently licensed to practise in Washington state.
The Law Society of B.C. issued a citation against him in June 2021, alleging various instances of misconduct that have not been proven. A hearing on that matter is still to be scheduled, according to the law society's website.
CTVNews.ca Top Stories
B.C. seeks ban on public drug use, dialing back decriminalization
The B.C. NDP has asked the federal government to recriminalize public drug use, marking a major shift in the province's approach to addressing the deadly overdose crisis.
More than 115 cases of eye damage reported in Ontario after solar eclipse
More than 115 people who viewed the solar eclipse in Ontario earlier this month experienced eye damage after the event, according to eye doctors in the province.
Orca calf that was trapped in B.C. lagoon for weeks swims free
An orca whale calf that has been stranded in a B.C. lagoon for weeks after her pregnant mother died swam out on her own early Friday morning.
Last letters of pioneering climber who died on Everest reveal dark side of mountaineering
George Mallory is renowned for being one of the first British mountaineers to attempt to scale the dizzying heights of Mount Everest during the 1920s. Nearly a century later, newly digitized letters shed light on Mallory’s hopes and fears about ascending Everest.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
'I was scared': Ontario man's car repossessed after missing two repair loan payments
An Ontario man who took out a loan to pay for auto repairs said his car was repossessed after he missed two payments.
Trump's lawyers try to discredit testimony of prosecution's first witness in hush money trial
Donald Trump's defence team attacked the credibility Friday of the prosecution's first witness in his hush money case, seeking to discredit testimony detailing a scheme between Trump and a tabloid to bury negative stories to protect the Republican's 2016 presidential campaign.
U.S. flight attendant indicted in attempt to record teen girl in airplane bathroom
An American Airlines flight attendant was indicted Thursday after authorities said he tried to secretly record video of a 14-year-old girl using an airplane bathroom last September.
Powerful tornado tears across Nebraska, weather service warns of 'catastrophic' damage
Devastating tornadoes tore across parts of eastern Nebraska and northeast Texas Friday as a multi-day severe thunderstorm event ramped up in the central United States.