News Release
Commission finds Sota Mining and two company executives violated the Securities Act
-
Date:
2001-07-23 -
Number:
2001/31
NR 01-31 Contact: Andrew Poon
Released: 07/23/01 899-6880 or
1-800-373-6393 (BC only)
Vancouver -- The B.C. Securities Commission has found that Sota Mining Group Ltd. and two of its executives violated the Securities Act by selling securities without being registered and without filing a prospectus.
The panel also found that Sota president Ronald James Henry and Gordon Dix Jr., the company’s vice-president investor relations gave advice to investors without being registered, which violates the Securities Act. Evidence showed that Dix, a former vacuum cleaner salesman, went to investor’s homes to sell the securities, which is prohibited under the Act.
The commission will rule on sanctions in the fall after hearing further from the parties.
BCSC staff told a commission hearing panel that between April 1998 and April 2000, Sota, Henry and Dix sold so-called net profit interests in Sota to 12 elderly investors, all of whom had little or no investment experience. Their investment totalled $128,000.
The commission said the information provided to investors did not remotely approach the standard of disclosure of a prospectus. The investors have received no return on their securities nor have they recovered their original investment Dix had no previous experience in mining or securities. He sold the Sota securities while visiting his elderly and unsophisticated clients in their homes. Sota paid Dix a commission of 50% for the funds he raised.
“Dix and Henry provided information to investors about Sota’s mining prospects and recommended that they invest,” the commission said. “It is clear they believed in the investments and recommended them without reservation.
“Their elderly and unsophisticated investors did not have the skills to evaluate the investments on their own and relied on Dix’s and Henry’s advice.”
The commission noted that Henry’s motivation was his quest for funds to acquire a company he could use to take Sota public. “As for Dix,” the commission said, “we need look no further than his eye-popping commissions.”
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 decision 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 899-6880.