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
Latest updates on air quality alerts, and when the smoke may reach Ontario and Quebec
Wildfires have led Environment Canada to issue air quality advisories for parts of B.C., Alberta, Manitoba, Saskatchewan and the Northwest Territories, as forecasters warn the smoke could drift farther east.
Ellen DeGeneres addresses the 'hurtful' end of her talk show in new stand-up set
Ellen DeGeneres is reflecting on how her talk show came to an end in her newest Netflix special, 'Ellen's Last Stand ... Up Tour.'
Steal a car, lose your driver's licence under new Ontario proposal
Repeat car thieves may face lengthy licence bans under proposed changes to Ontario’s Highway Traffic Act.
B.C. brings in law on name changes on day that child killer's new identity revealed
The BC NDP have tabled legislation aimed at stopping people who have committed certain heinous acts from changing their names.
What to pack during an emergency
Knowing what to have at home, or take with you for an evacuation, can be useful and even life-saving.
Significant police presence as Israeli flag flies at Ottawa City Hall
The Israeli flag is flying at Ottawa City Hall today to mark the country's national day, with plans to hold a private ceremony to mark Israel's Independence Day. There is a significant police presence at City Hall, including security barriers outside the main doors.
Hot history: Tree rings show that last northern summer was the warmest since year 1
The broiling summer of 2023 was the hottest in the Northern Hemisphere in more than 2,000 years, a new study found.
Regulated area for invasive box tree moth expanded to parts of the Maritimes
The Canadian Food Inspection Agency has added much of the Maritimes to a regulated area for an invasive species.
Already expensive, planning for fertility treatment difficult as costs vary widely
Being unable to have a child naturally can be extremely difficult. But when you factor in the high costs of fertility treatments, the range of individual circumstances and the fact that the industry itself is secretive about fees, it can make the whole ordeal even more devastating and hard to plan for.