Securities regulator alleges fraud and illegal distributions against B.C. man
VANCOUVER, May 30, 2013 /CNW/ - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a B.C.-based company and its director committed fraud and illegally distributed securities.
The notice alleges that between August 2007 and January 2012, Ronald Stephen McHaffie and BigFoot Recreation & Ski Area Ltd. (BigFoot) raised approximately $642,960 from 30 investors through the sale of shares in BigFoot. BigFoot was incorporated in B.C. in 2003, purportedly to develop a recreation and ski area near Jones Lake in B.C. BigFoot has never filed a prospectus in B.C., and McHaffie has never been registered to sell securities in B.C.
The notice alleges that, through the sale of shares in BigFoot, McHaffie committed a fraud. In that regard, McHaffie made false statements to entice investors, such as telling them that their investment would be used for expenses related to getting BigFoot publicly listed, and that construction or completion of the ski resort was imminent. These statements were false, as McHaffie used investor funds to pay for personal expenses, including gas, restaurants, groceries and retail purchases, not for expenditures related to taking BigFoot public. Furthermore, although BigFoot's ski resort proposal was rejected by the provincial government in September 2010, McHaffie continued to raise a total of $111,070 from investors after that date.
BCSC staff also allege that no exemption was available for 27 of the 30 investors, thereby rendering approximately $621,960 of the distribution illegal. As a result, staff maintains that McHaffie, as a director of BigFoot, authorized, permitted or acquiesced in the contravention of securities laws related to prospectus requirements.
These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on June 25, 2013 at 9:00am.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing BigFoot Recreation & Ski Area Ltd., Ronald Stephen McHaffie or 2013 BCSECCOM 73 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