News Release
BCSC Executive Director’s Bulletin: Regulator alleges fraud and contravention of various securities laws in distribution of three securities
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Date:
2009-06-09 -
Number:
2009/26
Vancouver - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that four people and three companies contravened various securities laws when more than $1 million of securities were sold to 32 investors, including at least 12 B.C. residents.
The notice of hearing states Steven Peter Kyllo, Glen Matthew and David Malcolm Ruthven were B.C. residents when they sold the securities of Moenkopi Resources Inc., Frey Mining Company Ltd. and Mercury Capital S.A. The notice alleges Steven Kyllo, Matthew, Ruthven, and the three companies contravened various securities laws by trading and distributing securities without being registered and without filing a prospectus in B.C.
Among other things, the notice also alleges that under Steven Kyllo’s instructions Matthew and Ruthven promised investors no-risk, high-yield returns when they sold Mercury and Moenkopi securities. The notice alleges that they should have known that the promises they made to investors were untrue, false, or misleading.
In addition, the notice alleges Cheryl Anne Kyllo, a registered mutual fund salesperson at the time and a B.C. resident, sold Mercury securities to investors while being restricted to selling mutual funds only. It also alleges Cheryl Kyllo, who is Steven Kyllo’s daughter-in-law, made misrepresentations when she sold the Mercury securities to investors.
Finally, the notice alleges Steven Kyllo committed fraud when he transferred the remaining investor funds out of a “high-yield” investment program to various parties, including himself, while promising investors that the return of their money was imminent.
These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on June 24, 2009 at 2 p.m.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website, www.bcsc.bc.ca. If you have questions, contact Ken Gracey, media relations, 604-899-6577.