The B.C. Securities Commission (BCSC) announced on Monday that it has paid out $20,000 to an investor who lost money in an unregistered investment.

The BCSC recovered the funds under a settlement agreement with Keith Henry Alexander, who admitted to violating securities rules by distributing securities without a prospectus and without being registered.

As part of the settlement, which also included market prohibitions, Alexander agreed to pay the money he’d obtained through his misconduct to the BCSC. In turn, the BCSC has now paid those funds to the investor, who submitted a claim to the regulator.

According to the settlement, Alexander was an investor in “a Ponzi scheme masquerading as a payday loan business.” The mastermind of the scheme used existing investors such as Alexander to bring in new investors to keep the scheme going.

The settlement indicates that Alexander raised $1.44 million from 13 investors for the scheme, relying on prospectus exemptions. But one investor (who gave $20,000) did not qualify for any exemption, which resulted in Alexander violating securities law in that instance and in him paying $20,000 back to the BCSC.

Investors who lose money in cases in which the BCSC has recovered funds that can be returned to them have three years to make a claim. In deciding whether to pay claims under this process, the BCSC considers several factors, including the amount of money recovered, the victim’s losses and whether the victim benefited from the misconduct, among other things.