A 10-year ban on participating in capital markets has been imposed on Sang H. Park of Toronto, as part of a settlement agreement approved by a hearing panel of the New Brunswick Securities Commission (NBSC).

The agreement also imposes an administrative penalty of $15,000 plus costs of $3,000.

The panel found that Park made an insufficient effort to ensure that N.B. residents who were investing in, or who were considering investing in, the securities he was promoting were qualified as accredited investors. This enabled his employer to take advantage of certain registration and prospectus filing exemptions available under N.B. securities law.

Accredited investors include individuals with net assets over $1 million — or income over $200,000 individually or $300,000 combined with a spouse’s income — and who may purchase securities without being provided a prospectus.

Park worked for Walton International Inc., a Canadian firm promoting securities to N.B. residents during presentations at a local restaurant. During these presentations he did not review the definition of an accredited investor. When he met with individuals to complete the required documentation, he did not take the steps necessary to ensure that they met the criteria of accredited investors under securities law. In some cases he downplayed the requirements. On one occasion he forged a witness signature acknowledging receipt of an offering document.

As a result of Park’s presentations, about $2 million was invested in the firm’s securities by 53 N.B. residents; 22 of them clearly did not meet the criteria for an accredited investor. Walton International Inc. offered all of the investors the opportunity to get their money back. None of the investors was harmed financially as a result of Park’s violations. He has since been dismissed from employment with Walton International Inc.

“Salespersons are reminded that they are responsible for knowing what can and cannot be included in their client’s investment portfolio,” says Rick Hancox, executive director of the NBSC. “It is important that both the salesperson and the investor communicate with each other when making any investment. Investors need to inform their salesperson of their risk tolerance, financial situation, investment objectives, experience and knowledge.”