The executive director of the British Columbia Securities Commission (BCSC) Tuesday issued a temporary cease trade order, and a notice of hearing, against three men and two companies over allegations of fraud and illegal distributions.
The BCSC announced that it has ordered that B.C. residents, Theodore Robert Everett, Leonard George Ralph, Robert H. Duke and two B.C. companies are to cease trading. They are also prohibited from engaging in investor relations.
The commission says the executive director issues temporary orders in situations where the length of time required to hold a hearing could be prejudicial to the public interest. A hearing has been slated for January 30, when the executive director will ask the commission to extend the temporary order until a hearing is held and a decision is handed down. None of the allegations have been proven.
The regulator says that between 2002 and 2011, Independent Academies Canada (IAC) raised $7.3 million from at least 150 investors in order to develop a complex combining sports, educational, wellness and residential components. Everett, Ralph and Duke are all directors and officers of IAC. It reports that the company filed 36 exempt distribution reports for at least 122 investors, who invested approximately $5.96 million, purporting to rely on exemptions from prospectus and registration requirements. However, BCSC staff allege that only 15 of these investors actually qualified for an exemption, thereby rendering much of the distribution illegal.
The BCSC also says that, in 2006, IAC purchased a property for this development, but in November 2009, foreclosure proceedings were commenced against it. And, the regulator alleges that the respondents committed fraud by failing to disclose this while continuing to market and sell IAC securities to 61 investors (raising approximately $1.49 million).
Additionally, the notice alleges that Everett, Ralph, Duke and Micron Systems Inc, the parent company of IAC, breached a cease trade order that had been issued against the company by BCSC staff on July 19, 2011. Everett, Ralph and Duke are also directors of Micron, it says.
The commission says that neither IAC, nor Micron, has ever filed a prospectus in B.C. Everett was a registered representative from March 1982 to March 1984, and Ralph and Duke have never been registered.