The executive director of the British Columbia Securities Commission has issued a notice of hearing and temporary order alleging that five B.C. individuals committed fraud, made false statements to prospective investors and illegally raised at least $7 million by selling loan contracts.

The temporary order prohibits trading in securities of any issuer directed, managed or promoted by the respondents until July 4.

The notice of hearing says that, since at least June 2005, Hal (Mick) Allan McLeod, David John Vaughan, Kenneth Robert McMordie (a.k.a. Byrun Fox), Dianne Sharon Rosiek and Robert (Robb) Murray Perkinson have been selling securities to investors in the form of high-yield loan contracts.

Among other things, the notice alleges that the respondents told investors that experienced traders would invest their funds, but instead they directed the funds to the control of the individual respondents and used them to perpetrate a Ponzi scheme.

These allegations have not been proven. A hearing will in Vancouver on July 4. At the hearing, counsel representing the executive director will ask the BCSC to extend the temporary order until a decision is rendered.