2012 BCSECCOM 360

Background
1. Wiegel is a resident of British Columbia. He is the director and officer of the following companies:

(a) Streamline, a real estate development company based in Vancouver, British Columbia;

(b) 835 Ltd., a company incorporated to develop a condominium in North Vancouver called “The Brook”;

(c) Local Inc., originally named The DeVille Building Inc., a company incorporated to develop a condominium in Vancouver originally called the “deVille”, and later “The Local 1661” or “The Local”; and

(d) Almaval Building Inc. (Almaval Inc.) a company incorporated to develop a condominium in Vancouver called the “Almaval”.

2. None of these issuers has ever filed a prospectus under the Act.

3. Knight is a resident of British Columbia. He was the General Manager of Streamline.

4. Wiegel is not registered in any capacity under the Act.

5. Knight was registered under the Act as a mutual fund salesperson between 1992 and 1995, but was not registered at the material times, and is not currently registered.

6. On April 5, 2004 the Executive Director issued an order (Order) prohibiting Knight from engaging in acts in furtherance of a trade or in investor relation activities for a period of three years.

Misconduct
Illegal Trading and Distribution of Securities
7. Between October 2006 and August 2010, the Respondents:

(a) raised approximately $2,085,000 by distributing securities of 835 Ltd. to 32 persons, all residents of British Columbia;

(b) raised approximately $1,940,000 by distributing securities of Local Inc. to 21 persons, the majority of whom were residents of British Columbia; and

(c) issued a security in the form of a promissory note on behalf of Almaval Inc. to two 835 Ltd. investors in respect of a $100,000 loan. (Promissory Note).

(collectively, the Distributions)

8. By distributing securities for which prospectuses had not been filed, and without being registered, the Respondents contravened sections 34 and 61 of the Act.

9. Wiegel and Knight authorized, permitted or acquiesced in the contravention of sections 34 and 61 of the Act, and therefore contravened the same provision under section 168.2 of the Act.

Fraud
10. In soliciting the investment in the Promissory Note, Knight and Wiegel told the investors that it would be secured by a mortgage on land located at 3701 West Broadway, Vancouver (Property). When the investors sought to enforce the security, they learned that neither the Respondents, nor Almaval Inc. owned the Property.

11. Knight and Wiegel breached section 57(b) of the Act by falsely claiming that the Promissory Note would be secured by a mortgage over the Property.

Breach of Order
12. Between October 2006 and April 5, 2007 (the date the Order expired), Knight breached the Order by distributing securities and engaging in investor relations activities.

Public Interest

Hearing Process