News Release

Vancouver - In settlement agreements with the British Columbia Securities Commission, three B.C. residents admitted to violating various securities laws when they solicited investors to participate in a scheme involving commodity futures contract trading that resulted in approximately $7 million US in investor losses.

Between October 2002 and May 2005, Kevin Jason Steele, David John Fulkco and his father Wallace (Wally) Gerard Fulkco solicited investors to enter into investment contracts with Steele's trading business that promised eight per cent per month returns.  As part of the scheme, Steele misrepresented to investors and to the Fulkcos that he was a successful commodity futures contract trader who would use their money for trading.  He created fictitious account statements that showed false trading profits for commodity futures contracts.

In total, 226 investors paid money to Steele of which 174 were B.C. residents.  The Fulkcos, who relied on the false information provided by Steele, solicited 214 investors.

Steele misappropriated about $1.9 million US of investors' money for his own use.  He also used approximately $1.8 million US to pay commissions and supposed profits on the investments.

In November 2005, a United States court found that Steele created false statements and defrauded investors. The court ordered Steele to pay investors approximately $7.4 million US in restitution and ordered a civil monetary penalty of $6.2 million US against him. In May 2006, Steele pleaded guilty in B.C. provincial court to one count of fraud over $5,000. The court sentenced him to six years in prison.

In the settlement agreement, Steele admitted to fraud, making misrepresentations and illegally trading and distributing securities.  As part of the settlement, Steele is prohibited, for his lifetime, from buying or selling securities, except in limited circumstances, from acting as a director or officer of any issuer and engaging in investor relations.
In their settlement agreements, David and Wally Fulkco admitted to making misrepresentations and illegally trading and distributing securities.  

As part of their settlement agreements, David Fulkco is prohibited, for 15 years, from buying or selling securities, except in limited circumstances, from acting as a director or officer of any issuer and engaging in investor relations.  Wally Fulkco is prohibited, for 10 years, from buying or selling securities, except in limited circumstances, from acting as a director or officer of any issuer and engaging in investor relations.

Steele and the Fulkcos have no prospect of paying fines the executive director would have assessed in the public interest.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlements on our website www.bcsc.bc.ca by typing in the search box, Kevin Jason Steele, Wallace Gerard Fulkco or David John Fulkco or 2008 BCSECCOM 168, 171 or 173. If you have questions, contact Ken Gracey, Media Relations, 604-899-6577.

Learn how to avoid investment fraud at the BCSC's investor education website: www.investright.org .