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News Release

British Columbia Securities Commission Releases Goldman Stanley Decision

  • Date:

    1997-04-04

  • Number:

    97/11

Released: March 27, 1997  Contact: Barbara Barry 660-4800 or (BC only) 1-800-373-6393

Vancouver, B.C. -- The British Columbia Securities Commission has permanently banned Goldman Stanley Consultants Inc. and three associated companies from participating in the securities markets. The ban results from their role in the illegal distribution of foreign exchange contracts to residents of British Columbia between May 1994 and January 3, 1996.

Each of these four companies -- Goldman Stanley Consultants, Chinamax International Investment Ltd. (Hong Kong), Chinamax International Investment Ltd. (British Columbia) and Peregrine Finance Ltd. (Alberta) - was controlled by Andy Chan (a.k.a. Wing Leung Chan, Ying-Leung Chan and Ying Leung Chan).

The Commission prohibited Chan from trading securities for 30 years and from serving as an officer or director of any issuer for the same period. Chan was also ordered to pay a $100,000 administrative penalty.

The Commission made similar orders against the following individuals:

Albert Dan Siega 10 year trading and director/officer ban - $5,000 fine
Wai Ming (Wendy) Wong 10 year trading and director/officer ban - $5,000 fine
Philip Y. Ho 3 year trading and director/officer ban - $3,000 fine
William Kee Yiu Lo 1 year trading and director/officer ban - $1,000 fine

The orders were announced today in a decision by the Securities Commission following a hearing held during July, August and September 1996.

The hearing concerned the Vancouver foreign exchange (forex) contract trading business of Goldman Stanley under the direction of Chan between November 1994 and July 1995. Goldman Stanley offered to trade forex contracts to the public as an agent for certain unregistered foreign forex dealers, including Chan's company Chinamax HK. In July 1995, following two preceding decisions from the Commission regarding illegal forex contract trading, Commission staff directed Goldman Stanley to shut down. Although Goldman Stanley closed its doors, Chan continued, with several ex-Goldman Stanley employees, to operate a clandestine forex contract trading operation involving Peregrine Alberta and Chan's girlfriend Wendy Wong.

The Commission found that each of the respondents, except Wong, traded in and advised on forex contracts without being registered, and distributed forex contracts without filing prospectuses, thereby violating the most fundamental requirements of the Securities Act. The Commission also found that Chan, Wong and Peregrine Finance Ltd. (Alberta) participated in a fraudulent scheme contrary to section 41.1 of the Act.

In its decision the Commission stated that:

In our view Chan's fraudulent conduct in the Peregrine operation was merely a continuation of a pattern of dishonest conduct that began when he took control of Goldman Stanley and introduced Chinamax HK as the dealer of choice.

Throughout his tenure as the boss, he controlled all the information and the operations so that the true nature of affairs was difficult to discover. He created the impression that the financial integrity of Goldman Stanley's forex contract trading business was well established and substantial when it was not. He failed to keep records. He ensured that Goldman Stanley did not pursue registration. He failed to disclose his ownership of Chinamax HK and Chinamax BC. He represented Chinamax HK as an established and legitimate forex dealer when it was not. He went to considerable lengths to create the illusion of legitimate activity when there was none. He baldly stated that Chinamax HK actually brokered forex contracts with other forex dealers yet failed to produce any documentation to substantiate his statement. Telephone and banking records confirm that trading activity was not being carried out as it had been represented to the clients by Chan and those who represented him. Through his counsel he misrepresented the nature of Goldman Stanley's and Chinamax's business to Commission staff. He decided to continue to trade forex contracts in the face of Commission staff's direction not to when Goldman
Stanley was shut down, and he enticed others to do the same. Chan was Chinamax HK, Chinamax BC and Peregrine Alberta. In our view, Chan probably operated the "Chinamax operation" no differently than he operated the Peregrine operation.

His conduct throughout was deliberate and fraudulent.
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts in the province. The 33 page decision may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.