News Release

Vancouver - The British Columbia Securities Commission has reached a settlement with a former stock picker and his company that permanently bans him from the province's capital markets, and includes a Supreme Court order that enables investors to seek to recoup their losses. 

In the settlement agreement, Albert Stephen Budai, a former B.C. resident, admitted to defrauding investors. Budai and StockDepot Information Services Corp. also admitted to illegal trading and distribution of securities as well as making misrepresentations to investors.

Between December 2001 and January 2004, StockDepot and Budai, the company's majority stockholder and president, raised approximately $1.4 million by issuing company shares to 49 investors - 25 in B.C. - without registration or filing a prospectus.

Budai admitted he committed fraud through a practice called "scalping" in which he bought and then sold the rising shares of companies he profiled in subscription-based publications and on a radio talk show. Budai did not tell his readers or radio show listeners that he was going to sell, or had sold, his shares after profiling the companies.

He also admitted he committed fraud when he bought Internet domain names that he then sold to StockDepot at inflated prices without disclosing to investors that he received monies from the sale.
 
Under the settlement agreement, Budai and StockDepot are permanently banned, with exceptions, from trading or purchasing securities. Budai is also permanently prohibited from acting as a director or officer of any issuer, except a private issuer in which he or his immediate family members are the sole shareholders, and he cannot engage in investor relations activities in his lifetime.

The executive director did not assess a $250,000 fine in the public interest against Budai because he has provided satisfactory evidence that he cannot pay the penalty.  However, Budai and StockDepot consented to an order from the Supreme Court of British Columbia, sought by the BCSC, that may help investors partially recoup their losses without having to pursue expensive and time-consuming civil litigation on their own. 

The Court order, granted on October 9, 2007, requires StockDepot to give to the BCSC  all profits from the sale of its domain names.  Under the Securities Act, when money is collected, the BCSC will notify the public who can then make a claim through the Court for their losses.

The Court also cancelled Budai's shares in StockDepot, ordered StockDepot to repay investors all the money collected from the purchase of its securities, and ordered Budai to compensate or make restitution to investors.

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, Albert Stephen Budai or StockDepot Information Services Corp., or 2007 BCSECCOM 610. 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.

Backgrounder - Section 15.1

The BC Securities Act, Securities Regulation, and Securities Rules, as well as notices, instruments, and policy documents, regulate trading in securities and exchange contracts within British Columbia. The government of British Columbia introduced Section 15.1 to the Act, which came into effect on May 18, 2006.

Claim for wrongful benefit

15.1 (1) The commission must notify the public in accordance with the regulations if the commission receives money from an order made under section 155.1 (b) or 157 (1) (b).

(2) A person that makes a claim to money held by the commission under this section must file the claim in the Supreme Court within 3 years from the date of the first notification made under subsection (1) and file a copy of the claim with the commission.

(3) If the commission receives a copy of a claim under subsection (2), it must pay into court all of the money the commission receives from an order made under section 155.1 (b) or 157 (1) (b).

(4) If the commission has paid money into court under subsection (3), any money remaining after the court has adjudicated all claims made under subsection (2) in relation to the money must be paid to the commission.

(5) After 3 years from the date of the first notification made under subsection (1), the commission may retain any money not claimed under subsection (2).