A former mutual fund rep has been found in violation of numerous securities laws by a B.C. Securities Commission (BCSC) hearing panel for her role in the operations of an unregistered company that sold shares without a prospectus.
The BCSC panel found that former fund dealer rep, Yan Zhu (aka Rachel Zhu), Guan Qiang Zhang, and their company, Bossteam E-Commerce Inc., committed fraud, illegally distributed securities, and withheld information from BCSC investigators. The panel didn’t immediately hand down any sanctions in the case, any penalties will be determined after it considers submissions from both sides.
According to the decision, Zhu, who was the sole director of Bossteam and acted as its chief financial officer when it started up, was registered as a fund dealer rep between 2009 and 2012, and she was registered as a life insurance agent too. Zhang was CEO of Bossteam. He lived in B.C., but was deported to China in 2012. Their company was in the online advertising business.
According to the decision, they illegally distributed securities in the firm without filing a prospectus; and, they committed fraud when they created the false impression that Bossteam members and well-known businesses were paying Bossteam to advertise on its websites.
Additionally, the panel concluded that Zhu, Zhang, and Bossteam withheld information about payments from Bossteam “members” for securities, thereby disrupting the BCSC’s investigation and obstructing justice. It also found that Zhang and Zhu instructed the company’s employees and members to tell investigators that it was only selling advertising, and to refer to its shares as “consumer credits” to attempt to conceal their true nature. And, it noted that Zhu lied to an investigator about informing her fund dealer about her outside business activities.