News Release
BCSC settles with reps who sold unsuitable interests in northern cattle ranch resort
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Date:
2001-08-29 -
Number:
2001/36
Released: 08/29/01 Contact: Andrew Poon
NR 01-36 (604) 899-6880 or
(BC only) 1-800-373-6393
Vancouver -- The BC Securities Commission has reached a settlement agreement with seven securities sales representatives who helped sell more than $13-million of unsuitable investments, including interests in a cattle ranch resort, to unsophisticated investors in Northern BC.
Rod Albers, Michael Flynn, Debbie Hanrahan, Peter James, Roger Ollenberger, Gordon Paterson and Alastair Sanderson have each agreed to pay the commission administrative penalties and be subject to strict supervision if they seek registration to sell securities in BC again. The individuals have also been barred for varying periods from relying on certain exemptions to sell securities and from engaging in investor relations activities.
The seven had worked for IDF Financial Services Incorporated (IDF) based in Prince George, BC. During their employment at IDF, they helped to sell securities in a number of issuers, including interests in River Ranch Resort (a cattle ranch resort under development south of Vanderhoof) to mostly Northern BC investors. In many instances, the interests in River Ranch Resort -- a high-risk investment -- were sold to people with limited investment knowledge.
The seven were among individuals named in a notice of hearing on May 3, 2001, in which commission staff alleged a number of breaches of the BC Securities Act and Rules including:
- Illegal distribution of securities (section 61 of the Act)
- Selling securities unsuitable to the investment needs and objectives of clients (section 14 and 48 of the Rules)
In reaching the settlement agreement, the executive director took several mitigating factors into consideration, including:
- During their employment at IDF, the respondents received training and instruction from the principals of the firm that materially contributed to their breaching the securities legislation of BC.
- In making the trades, the respondents received specific instruction in some cases from IDF's branch manager that the securities were suitable for clients.
- Each of the respondents has experienced significant financial loss as a result of their employment with IDF.
- Each respondent has co-operated with commission staff's investigation.
The seven may seek registration to sell securities again, but only by applying for employment with member firms of the Investment Dealers Association of Canada or the Mutual Fund Dealers Association and if they successfully complete additional training.
The hearing for the corporate respondents and the remaining individuals -- Mark Cramer, Michael Cramer, and James Fortin -- has been adjourned until April 8, 2002.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province. Copies of the settlement and related notices can be viewed in the documents database of the commission’s website www.bcsc.bc.ca or by contacting Media Relations Officer Andrew Poon at (604) 899-6880.