A Calgary man has been permanently banned and ordered to pay $460,000 in penalties and costs for trading without registration and illegally distributing securities.
A hearing panel of the Alberta Securities Commission (ASC) ruled that Neil Suresh Chandran, and his various companies (Energy TV Inc., Chandran Holding Media, Inc., and Chandran Media) should be permanently banned from trading, and that Chandran is also prohibited from being registered and from serving as a director or officer. He is also ordered to pay a $400,000 penalty, and he and the companies are required to pay $60,000 in costs after they admitted to illegally trading and distributing securities.
Prior to a hearing in the case, the respondents and ASC staff entered a joint statement, outlining the conduct that gave rise to the enforcement action and proposing sanctions. The panel ruled that the facts set out in the statement establish the alleged misconduct and that the proposed penalties are appropriate.
The statement indicates that the companies raised approximately $39 million from more than 200 investors to fund a genuine media production business by selling shares in the companies or entering loan arrangements that promised high returns. These securities were sold without registration, a prospectus, or in most cases an exemption. And, the businesses ultimately failed, resulting in many investors losing their money.
“Whatever the precise role of each respondent in respect of any particular transaction, we are satisfied — and we find — that each respondent engaged in some fashion in at least some of the mentioned trades and distributions; this is implicit in the admissions of illegal trading and distributions by all respondents,” the panel noted.
In terms of the sanctions, the panel noted that while permanent market bans are a deterrent, “Bans alone, though, would fall short of what is required here.”
“As in other cases — and particularly given the scale of the illegal capital-raising here — we consider that the appropriate messages of specific and general deterrence must include a substantial direct monetary order in the form of an administrative penalty. Given his central role in the misconduct, we think it would suffice were such an order imposed only against Chandran,” it said.