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Offshore companies illegally sold securities to B.C. investors

  • Date:

    2005-09-16

  • Number:

    2005/54

Vancouver – The British Columbia Securities Commission has ruled that Bahamas-incorporated companies operating in B.C. and Arizona that sold securities – touting offshore tax haven education and access to investment opportunities promising returns up to 400 per cent – to B.C. residents violated securities laws.

The Corporate Express group, including 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, violated the Securities Act by:

  • Trading securities without being registered to do so, and
  • Distributing securities without filing a prospectus.

Corporate Express made statements about the future price of an investment – offering returns of 50-, 175-, and 400-per-cent – 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 B.C. residents who paid about $40,950 (U.S.). Corporate Express, Fortress and Great American also illegally sold additional securities to at least 15 B.C. investors totalling almost $195,000 (U.S.).

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 B.C.-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.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box, Corporate Express or 2005 BCSECCOM 583. If you have questions, contact Andrew Poon, Media Relations, 604-899-6880.