The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that the former president and CEO of a B.C. corporation listed on the TSX Venture Exchange engaged in market manipulation.
The notice alleges that Damien Reynolds, a Vancouver resident, caused or contributed to an artificially low price in the shares of Coltstar Ventures Inc. Reynolds was president and CEO of Coltstar from March 22, 2010 to January 2012, prior to which time he served on the board of directors.
The notice contends that Reynolds twice used a brokerage account held in his mother’s name to sell shares in the company, and in doing so created an artificially low price in Coltstar’s shares.
The first sell was made on March 12, 2010. On March 17, Coltstar announced that JAT 001 Holdings Ltd. would receive 700,000 convertible debentures, each convertible into one Coltstar common share and one warrant within five years based on the March 12 closing price of $0.15. Coltstar describes JAT in its filings with the TSXV as both an insider of the company, and a family trust controlled by Reynolds.
The second sell was made on March 19, 2010. On March 22, Coltstar held a board meeting where incentive stock options were approved for its directors, based on the March 19, 2010 closing price of $0.22. Reynolds chaired the board meeting and personally received 1,000,000 optioned shares pursuant to the stock options.
The lowest market closing prices for Coltstar shares between November 25, 2009 and November 12, 2010 were after the first and second sells.
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 March 6.