A British Columbia man has been fined $6 million and permanently banned from the province’s capital markets for perpetrating a $1.3-million fraud scheme and leading investors to believe he was a registered advisor.

A decision released by the British Columbia Securities Commission on Monday outlines penalties against Luc Castiglioni.

According to the BCSC, Castiglioni raised a total $8.2 million from more than 60 investors using two companies through which he controlled the flow of funds: CPLC Limited Partnership and CPLC Management Group Ltd. Neither company was registered with the commission.

CPLC documents led investors to believe that their funds would be invested in CPLC-managed investment funds, which would in turn invest in publicly traded securities.

But commission staff traced $1.3 million in investor funds during the investigation, and found that Castiglioni used this money to enrich himself and his family members, and for other purposes.

Castiglioni prepared false account statements for investors, and misrepresented the structure and operation of the companies to them. He also forged bank statements to mislead commission staff.

Castiglioni also indicated in documents that CPLC Management Group was a registered portfolio manager and that he was a registered advisor.

“This was a lie, and a serious one,” the BCSC panel said. “Registration is one of the key investor protection mechanisms in the Act, and a representation of registration leads investors to a degree of trust and reliance they otherwise would not have.”

CPLC Limited Partnership engaged in conduct contrary to the public interest by distributing securities that were integral to the fraud, according to the BCSC.

Castiglioni has been fined $6 million, and has been ordered to disgorge nearly $1.3 million.

In addition to the administrative penalty, the panel ordered Castiglioni permanently banned from trading securities or exchange contracts and from being a manager or consultant in connection to the securities market. Castiglioni is also prohibited from being a director or officer of any issuer, registrant or investment fund manager, being a registrant, investment fund manager or promoter, and from engaging in investor relations activities.

The panel permanently cease traded the securities of CPLC Limited Partnership and CPLC Management Group. Both companies are also permanently banned from purchasing securities or exchange contracts, from acting as a registrant, investment fund manager or promoter, and from engaging in investor relations activities.

IE