News Release

Vancouver - The British Columbia Securities Commission has settled with William Malone and Nelson Riis after they admitted that a start-up company they managed made unreasonable financial projections and misleading claims about its business prospects. 

From January 2002 to September 2005, Canadian Rockport Homes Int’l, Inc. (Rockport) raised about $4.4 million US from investors in B.C. and elsewhere. At the time of the distributions, Malone was the chairman, CEO and president, and Riis was an officer and director of Rockport, a start-up company that manufactures and sells modular housing.

In a settlement agreement with the BCSC, Malone and Riis admitted that Rockport made unreasonable financial projections in its offering documents. Rockport also made the projections in an executive summary and in business plans, which it provided to potential investors.

Rockport projected that it would earn revenue of $5.38 billion over a five-year period. When the company made the projections, it had not commenced commercial production, earned any revenue, or negotiated any contracts for the sale of its homes.

Malone and Riis also admitted Rockport made overly optimistic and misleading claims in its executive summary and business plans as well in shareholder newsletters. These claims included assertions that the company would soon trade publicly on NASDAQ and enter into a major sales contract.

As officers and directors of Rockport, Malone and Riis authorized, permitted or acquiesced in Rockport’s contraventions.
 
Under the settlement agreement, Malone cannot act as a director or officer of any issuer or engage in investor relations for three years. He will be permitted to remain an officer and director of Rockport if, within three months, he obtains the approval of Rockport’s shareholders. Malone must also pay $50,000.

Riis is prohibited from acting as a director or officer of any issuer or engaging in investor relations for two years. Riis must also pay $40,000.

The BCSC cease traded Rockport securities on Dec. 31, 2008 for compliance-related issues that were uncovered during the investigation. The cease trade order remains in place until the executive director issues a revocation order allowing the securities to trade again.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlement on our website www.bcsc.bc.ca by typing in the search box, William Malone or Nelson Riis or 2009 BCSECCOM 45. 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.