Mortgage lender misled investors, BCSC hearing finds
A panel of the British Columbia Securities Commission has concluded that a Salmon Arm man and his company made misrepresentations and false or misleading statements to investors.
The findings affirm allegations the commission's executive director made in January 2020 about Donald Bergman and his company All Canadian Investment Corporation.
Bergman will now face sanctions from the BCSC, which will be determined after submissions from the executive director and Bergman himself this fall.
According to the panel's decision, Bergman was the sole director of All Canadian Investment Corporation, a mortgage lender that provided loans to owners and developers of residential and commercial real estate.
The misrepresentations and false or misleading statements Bergman made came in three "offering memorandums" that explained to investors how the loans would be secured.
ACIC raised $1.6 million from 56 investors through the memorandums between January 2014 and December 2015, according to the BCSC.
"The offering memorandums said the mortgages would be registered in the appropriate land title office, and were the first or second mortgage on the property; however, ACIC did not register some of the mortgages and cancelled some of the registrations," the BCSC said in a news release.
"In addition, some of its mortgage loans were secured by mortgages that ranked lower in priority than represented in the documents."
According to the panel's decision, Bergman defended himself against the commission's allegations of misrepresentations by focusing on what he described as the intent of the memorandums.
He argued that the memorandums said only that the properties would be registered, but not for how long, and told the hearing panel that in some cases it would be advantageous to deregister a mortgage in the interest of taking a flexible approach with the borrower, according to the decision.
The decision describes Bergman's arguments as "without merit."
"Although Bergman’s belief was that investors were to some extent relying on his judgment in which mortgage registrations to cancel instead of relying on the registrations themselves to protect investment returns, an investment made on such a basis would be a fundamentally different type of investment from one offered in the (offering memorandums)," the panel wrote in its decision.
"Bergman’s reading of the OMs and his interpretation of the expectations of investors reflects his own subjective beliefs and not a fair, objective reading of the relevant clause."
According to the BCSC's release, dividends paid to investors in Bergman's company began dwindling in 2015. In 2017, the Supreme Court of B.C. appointed a monitor to help ACIC liquidate its assets, and losses for preferred shareholders are estimated to be between 81.9 per cent and 96.1 per cent.
CTVNews.ca Top Stories
Quebec nurse had to clean up after husband's death in Montreal hospital
On a night she should have been mourning, a nurse from Quebec's Laurentians region says she was forced to clean up her husband after he died at a hospital in Montreal.
Northern Ont. lawyer who abandoned clients in child protection cases disbarred
A North Bay, Ont., lawyer who abandoned 15 clients – many of them child protection cases – has lost his licence to practise law.
Bank of Canada officials split on when to start cutting interest rates
Members of the Bank of Canada's governing council were split on how long the central bank should wait before it starts cutting interest rates when they met earlier this month.
Maple Leafs fall to Bruins in Game 3, trail series 2-1
Brad Marchand scored twice, including the winner in the third period, and added an assist as the Boston Bruins downed the Toronto Maple Leafs 4-2 to take a 2-1 lead in their first-round playoff series Wednesday
Cuban government apologizes to Montreal-area family after delivering wrong body
Cuba's foreign affairs minister has apologized to a Montreal-area family after they were sent the wrong body following the death of a loved one.
'It was instant karma': Viral video captures failed theft attempt in Nanaimo, B.C.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
What is changing about Canada's capital gains tax and how does it impact me?
The federal government's proposed change to capital gains taxation is expected to increase taxes on investments and mainly affect wealthy Canadians and businesses. Here's what you need to know about the move.
New Indigenous loan guarantee program a 'really big deal,' Freeland says at Toronto conference
Canada's Deputy Prime Minister Chrystia Freeland was among the 1,700 delegates attending the two-day First Nations Major Projects Coalition (FNMPC) conference that concluded Tuesday in Toronto.
'Life was not fair to him': Daughter of N.B. man exonerated of murder remembers him as a kind soul
The daughter of a New Brunswick man recently exonerated from murder, is remembering her father as somebody who, despite a wrongful conviction, never became bitter or angry.