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
DEVELOPING Live updates as Stormy Daniels testifies at Trump hush money trial
Adult film star Stormy Daniels will take the stand a second time Thursday as former U.S. president Donald Trump’s hush money case continues in Manhattan. Follow live updates here.
BREAKING Toronto Maple Leafs fire head coach Sheldon Keefe
The Toronto Maple Leafs have fired head coach Sheldon Keefe. The team made the announcement Thursday after the Original Six franchise lost to the Boston Bruins in seven games in the first round of the Stanley Cup playoffs.
Bank of Canada says financial system is stable, but risks remain
The Bank of Canada says the Canadian financial system is stable, but risks remain due to debt servicing costs among households and businesses and stretched valuations of financial assets.
Why these immigrants to Canada say they're thinking about leaving, or have already moved on
For some immigrants, their dreams of permanently settling in Canada have taken an unexpected twist.
Here are the ultraprocessed foods you most need to avoid, according to a 30-year study
Studies have shown that ultraprocessed foods can have a detrimental impact on health. But 30 years of research show they don’t all have the same impact.
Torchbearers in Marseille kick off the Olympic flame's journey across France
Torchbearers carried the Olympic flame through the streets of France's southern port city of Marseille on Thursday, a day after it arrived on a majestic three-mast ship for a welcoming ceremony.
Capital gains tax change 'shortsighted' and 'sows division' business groups tell Freeland
Forging ahead with increasing Canada's capital gains inclusion rate 'sows division,' and is a 'shortsighted' way to improve the deficit, business groups are warning Finance Minister Chrystia Freeland.
Court to hear about search for remains as Winnipeg murder trial enters second day
A courtroom in Winnipeg is expected to hear testimony today about the search for the remains of the four victims of Jeremy Skibicki.
Ontario man frustrated after $3,500 paving job leaves driveway in shambles
An Ontario man considering having his driveway paved received a quote from a company for $7,000, but then, another paver in the neighbourhood knocked on his door and offered half that rate.