BCSC panel issues lifetime ban against B.C. man for attempted fraud
VANCOUVER, Oct. 11, 2012 /CNW/ - A British Columbia Securities Commission panel has permanently banned a B.C. man from the province's capital markets for making misrepresentations in an attempted fraud.
The panel found that between 2009 and 2012, Paul Lester Stiles promoted an investment in Velocity Entertainment Inc. that he claimed would provide B.C. investors with returns ranging from 12% in one year to 100% within six months. Stiles was the sole director of Velocity, which was dissolved in 2005 and has never filed a prospectus in B.C.
In July and August 2011, BCSC staff discovered two identical advertisements in the Financial Services section of Vancouver's Craigslist website that promoted the Velocity investment. A BCSC investigator posing as a potential investor responded to the advertisements, requesting further information. In the ensuing email correspondence, Stiles promoted the investment and sent the investigator an investment agreement claiming, among other things, that the money would be used by Velocity to produce two feature films. Stiles made a number of false statements in promoting the investment, including that it would provide a "totally secure" rate of return of 100% in six months, and provided instructions to transfer funds to his bank account.
In March 2012, BCSC staff discovered a third advertisement on Craigslist promoting Velocity. Again, a BCSC investigator posing as an investor responded to the advertisement, and in the ensuing email correspondence Stiles made numerous claims, including that he would guarantee the investment.
In its decision, the panel noted that Stiles had posted similar solicitations on Craigslist in September 2009, and that BCSC staff had warned him that his capital raising activities were in contravention of securities laws the following October. In April 2012, he again ignored BCSC staff warnings that his conduct breached securities laws. The panel characterized Stiles' disregard of BCSC staff warnings as "contempt for our system of securities regulation", and stated that his conduct "shows that he has attempted fraud before and will continue to do so."
For his misconduct, Stiles is permanently banned from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant. He is also permanently prohibited from becoming or acting as a registrant, investment fund manager or promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market.
The panel also ordered Stiles to pay an administrative penalty of $35,000.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website, www.bcsc.bc.ca, by typing Stiles, Velocity Entertainment Inc. or 2012 BCSECCOM 383 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission