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
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.
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.
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.
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.
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.
'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.
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.
Air traveller complaints to Canadian Transportation Agency hit new high
The Canadian Transportation Agency has hit a record high of more than 71,000 complaints in a backlog. The quasi-judicial regulator and tribunal tasked with settling disputes between customers and the airlines says the backlog is growing because the number of incoming complaints keeps increasing.
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.