The B.C. Securities Commission (BCSC) agreed to settle allegations that a B.C. man violated the public interest by hiding his 16% stake in an over-the-counter (OTC) issuer, which prevented the regulator from determining whether the company’s stock was manipulated.

The BCSC announced that it settled with Alnoor Ramji, who admitted he participated in a scheme to conceal his ownership stake in a Nevada-based OTC issuer, Clean Power Concepts Inc. (OTC:CPOW), through offshore nominee accounts. He agreed to a permanent ban and an $85,000 payment to settle the allegations.

According to the settlement, Ramji’s trading behavior “was consistent with a market manipulation”. However, it says that the regulator’s staff were unable to determine whether or not it was manipulation “because of the steps Ramji took to conceal the beneficial ownership of 16% of the Clean Power stock and the distribution of the trading proceeds.”

“Commission staff’s investigation was obstructed by Ramji and the nominees’ use of offshore companies, brokerage and banks,” it says.

The settlement indicates that Ramji arranged the transfer of approximately 33.5 million shares in the company to five friends and relatives in B.C., who were all unsophisticated investors with minimal investment experience and insufficient financial resources to purchase the shares for themselves. They followed Ramji’s instructions, it says, by transferring their shares to trading accounts at Gibraltar Global Securities (a Bahamas-based brokerage firm that was banned by the BCSC in 2012). Those trading accounts were in the name of companies incorporated in Panama or Belize.

From December 16 to 30, 2010, a Montreal-based public relations firm carried out an internet-based promotional campaign on Clean Power, which saw the average daily volume of Clean Power shares traded, and the price of Clean Power shares, increase. Then, between December 20, 2010 and January 20, 2011, Ramji and the nominees sold approximately 35.85 million shares of Clean Power, generating proceeds of about USS$8.3 million. The proceeds were then wired to bank accounts in Hong Kong, Switzerland, Belize and Panama, in the names of other persons.

Ramji admitted he breached securities laws by failing to file a report disclosing his beneficial ownership of, or control over, the Clean Power shares. As part of the settlement, he is permanently banned from B.C.’s securities markets and agreed to pay $85,000 to the BCSC.