The victim of an illegal distribution is going to get some more money back under disgorgement orders issued by the British Columbia Securities Commission (BCSC).
In 2023, a BCSC hearing panel banned a company, Bracetek Industries Group Ltd., for seven years, fined it $50,000, and ordered it to disgorge $850,000 after finding that it violated securities laws when it received $1.75 million from an investor without issuing a prospectus, or qualifying for an exemption.
While the company took $1.75 million from the investor, the panel only ordered $850,000 in disgorgement against it, given a settlement that had already been reached in the case. That settlement included $900,000 in disgorgement ordered against Geoffrey Rajay Sidhu, the son of Bracetek’s sole director and officer, who helped arrange the transaction.
According to the BCSC, Sidhu paid $900,000 in disgorgement, which was already returned to the investor.
Now, the victim will get more money back, following a partial payment of the disgorgement order against Bracetek.
The BCSC said the company made a payment of $178,750 in March. That amount, plus $4,600 in interest, will be paid to the investor “who is the only person to have filed a claim,” the regulator noted.
In its decision against Bracetek, the panel said the investor suffered “significant” financial harm, “given the size of the investment relative to her net worth and annual income.”
According to the decision, she financed the investment by obtaining a $2 million mortgage on her home in Vancouver, which she then had to sell to pay off the mortgage after losing all of her investment.