West Vancouver man agrees to $950K fine, 10-year investing ban for financial misconduct
A West Vancouver man has paid $950,000 to B.C.'s securities regulator and agreed to a 10-year ban from participating in the investment market for his role in a scheme that was abusive to the market.
The scheme involved "private placements" – sales of shares to small groups of investors that don't take place on the open market – and prepaid consulting fees.
Justin Edgar Liu and two companies he controlled – Lukor Capital Corp., which dissolved in 2017, and Asiatic Management Consultants Ltd. – admitted in a settlement agreement with the B.C. Securities Commission this week that they participated in the scheme.
Liu and Lukor were "placees" for more than $5.6 million worth of shares in two companies, which were provided to them in three private placements, according to the BCSC.
They also received more than $600,000 worth of shares from other placees after two other private placements.
"In addition to obtaining private placement shares in their own names, the Liu respondents also paid $12,370,500 to other placees, who used the funds to purchase other private placement shares as part of the scheme," the settlement reads.
In all, the scheme involved nine issuers of securities making 12 private placements, from which they publicly announced total proceeds of more than $50.8 million, according to the agreement.
The nine companies only retained less than $7.9 million of that total, however, with the rest going to consultants such as Lukor, which had done little or no actual consulting work.
"One or more of the Liu respondents directly received consulting fees which collectively totaled $4,543,750 from all nine Issuers," the settlement reads. "One or more of the Liu respondents or other entities associated to Liu indirectly received additional amounts from other consultants."
The agreement notes that Liu and his companies' participation in the scheme constituted conduct that was abusive to the capital markets.
Under the settlement, Liu and his companies jointly agreed to pay $950,000 to the BCSC and to be banned from participating in the investment market for 10 years. There is an exception, however, that allows Liu to invest via his own account through a registered dealer or registrant, as long as he provides them with a copy of the BCSC's order against him first.
The BCSC said in a news release announcing the sanctions against Liu that he has already paid the $950,000 penalty.
CTVNews.ca Top Stories
Deadly six-vehicle crash on Highway 400 sparked by road rage incident
One person was killed in a six-vehicle crash on Highway 400 in Innisfil Friday evening.
'Of course, yes': Poland latest European country with interest in Canadian LNG
The President of Poland says his country would 'of course' be interested in purchasing Canadian liquefied natural gas if it were available, while the Canadian federal government has said it is 'not interested' in subsidizing future projects.
Here's where Canadians are living abroad: report
A recent report sheds light on Canadians living abroad--estimated at around four million people in 2016—and the public policies that impact them.
Dozens in Italy give a fascist salute on the anniversary of Mussolini's execution
Dozens of people raised their arms in the fascist salute and shouted a fascist chant during ceremonies Sunday to honor Italian dictator Benito Mussolini on the 79th anniversary of his execution.
Chants of 'shame on you' greet guests arriving for the annual White House correspondents' dinner
An election-year roast of U.S. President Joe Biden before journalists, celebrities and politicians at the annual White House correspondents' dinner Saturday.
Invasive and toxic hammerhead worms make themselves at home in Ontario
Ontario is now home to an invasive and toxic worm species that can grow up to three feet long and can be dangerous to small animals and pets.
Health minister 'deeply appreciative' of doctors but capital gains changes here to stay
Health Minister Mark Holland says while he is 'deeply appreciative' of the work doctors in Canada do, the federal government has no plans to scrap the proposed capital gains tax changes outlined in the latest budget, despite opposition from the Canadian Medical Association.
Opinion I just don't get Taylor Swift
It's one thing to say you like Taylor Swift and her music, but don't blame CNN's AJ Willingham's when she says she just 'doesn't get' the global phenomenon.
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.