News Release
B.C. man misrepresented telecom investment and committed fraud
-
Date:
2007-12-17 -
Number:
2007/79
Vancouver - A British Columbia Securities Commission panel has found that the chief executive officer of a B.C.-based business contravened various securities laws when he traded and distributed securities without being registered and without a prospectus, made misrepresentations, and fraudulently moved funds into his fiancée's account.
In early 2000, Michael Savage, a B.C. resident, promoted and sold the securities of Savage Tele.com Corporation, as exempt securities, to a group of eight investors. He told them that the company existed, knowing that incorporation had been delayed. He also told them that the business had purchased two of a planned 24 internet service providers, knowing that it had not done so. The panel found that these were misrepresentations.
When Savage was promoting and selling the investment, purportedly in Savage Tele.com Corp., he was not registered to trade securities in B.C., nor had a prospectus been filed. The panel found that no registration or prospectus exemptions applied.
In June 2000, the investors asked Savage for their money back and threatened to sue. The next day Savage withdrew US $530,000 from a company account to avoid a possible court order to pay the funds into court during any litigation. In August 2000, Savage endorsed about US $246,000 of these funds over to his fiancée.
The panel found that Savage perpetrated a fraud when he moved the money to his fiancée and gave her unrestricted access to funds to which she was not entitled.
The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box, Michael Savage or 2007 BCSECCOM 737. 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.