The British Columbia Securities Commission has ruled that certain Bahamas-incorporated companies operating in the Canadian province of British Columbia and in the US state of Arizona that sold securities to BC residents violated securities laws.
According to the BCSC, the Corporate Express group touted "offshore tax haven education and access to investment opportunities promising returns up to 400 per cent". Other entities included in the group were Corporate Express Inc., Corporate Express Club, and Corporate Express Club (CEC) 1998, Fortress International Ltd., Great American Gold Ltd., John Thomas McCarthy and Cameron Willard McEwen.
The firms violated the Securities Act by trading securities without being registered to do so, and by distributing securities without filing a prospectus.
Corporate Express made statements about the future price of an investment – offering returns of 50, 175, and 400% – in promoting the purchase of its securities, contrary to the Act.
Corporate Express, Fortress and Great American, McCarthy and McEwen also breached the commission’s temporary orders by trading in the securities of Corporate Express and Great American. McCarthy and McEwen also breached the temporary orders by engaging in investor relations activities.
Corporate Express sold memberships to 264 individuals that included 117 BC residents who paid about US$40,950. Corporate Express, Fortress and Great American also illegally sold additional securities to at least 15 BC investors totalling almost US$195,000.
The commission panel has directed that the temporary orders remain in effect and will make its decision on sanctions after reviewing submissions from the parties.
In June 2004, the BC-based sales manager for Corporate Express settled with BCSC staff in this matter. Patrick Thomas Stojak was banned from the capital market for three years and agreed to pay $5,000 as part of the settlement.
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