The B.C. Securities Commission (BCSC) has issued a temporary order, and brought enforcement allegations, against a Swiss bank over concerns that it is engaging in trading and advising for B.C. residents without registration.
The BCSC said Wednesday that it has issued a temporary order against Bank Gutenberg (formerly CAT Brokerage AG), a Swiss private bank and investment dealer that offers offshore brokerage services, amid allegations that the bank breached securities laws by trading and providing securities advice to at least two investors in B.C. The allegations have not been proven.
The commission says that the temporary order will allow it to continue its investigation into the bank. It notes that it issues temporary orders “in situations where the length of time required to hold a hearing could be prejudicial to the public interest.”
The regulator reports that BCSC staff “strongly suspects” that there are other B.C. residents who trade through Bank Gutenberg. It notes that, in February, the bank held 16 trading accounts with six different Vancouver-based brokerage firms, and that it used these accounts to trade TSX Venture issuers. And, it says that representatives from the bank visit Vancouver to meet with registrants and other market participants.
However, it says that the bank “has refused to answer direct enquiries, claiming that Swiss secrecy laws do not permit them to directly provide the requested information, and Swiss criminal laws prohibit them from complying with orders or requests from foreign authorities.”
The BCSC argues that his refusal to cooperate makes the company unsuitable to participate in the markets in B.C. Counsel for the commission’s executive director will apply to extend the temporary order on August 22, it says.
In addition to allegations that the bank has facilitated trading and provided advice without registration, the BCSC also charges that the bank “offered its services through its website without prominently posting a disclaimer that expressly identifies the foreign jurisdictions in which the offering or solicitation is qualified to be made, and failed to take reasonable precautions not to sell to B.C. residents.”