The Alberta Securities Commission has ordered several companies and individuals associated with a Lethbridge-based ticket-scalping business to pay fines and costs totaling $385,000 for illegally distributing securities.

In a sanction decision released on Friday, the ASC outlined penalties against 1205676 Alberta Ltd., operating as Front Row Tickets. The company was in the business of purchasing large amounts of tickets to concerts and other events, then reselling those tickets either privately or to other ticket brokers at higher prices to earn a profit.

The ASC found that the company raised money through the illegal distribution of Front Row securities between mid-2005 and mid-2007. Front Row had not filed a prospectus in Alberta to distribute its securities, and none of the individuals who distributed the securities were registered to trade in securities.

Evidence shows that Front Row offered investors very lucrative rates of return ranging from 5% for 60 days to 152% per year.

In total, the ASC estimates that Front Row raised at least $15 million in investor loan money.

The evidence indicates that most investors received their interest payments, principal repayments or both until early 2007, according to the ASC, although it found that payments to investors were often made later than promised. But some clients who testified said they never received their principal back, or any interest.

The ASC has ordered that all trading in or purchasing of Front Row Tickets securities cease and Front Row Tickets be banned from trading in or purchasing securities and using Alberta securities laws exemptions, unless and until the executive director of the ASC issues a receipt for a prospectus in respect of any securities that Front Row Tickets wishes to trade.

Jason Hunt, the sole director, officer and shareholder of Front Row, has been banned from trading in or purchasing securities, using Alberta securities laws exemptions and acting as a director or officer of any issuer for 10 years. He must also pay an administrative penalty of $85,000 and $25,000 towards the costs of the investigation and hearing.

The other individuals involved in the distribution of Front Row securities also face fines and costs.

Two individuals involved in distributing Front Row securities, Robert Pilling and Daniel McLeod, were also sanctioned for making misrepresentations to investors concerning guaranteed principal, interest or both. Each has been ordered to pay an administrative penalty of $25,000, as well as costs.

IE