News Release

Vancouver – A convicted fraudster and his company who cheated 45 investors out of more than $2.4 million have been permanently banned from the province’s capital markets by a British Columbia Securities Commission panel.

Richard John Smith and Synlan Securities Corp., of which Smith serves as president, director, secretary and treasurer, were also ordered by the panel to pay a total of $750,000 in administrative penalties for violating the Securities Act. Those violations include failing to be registered as required under the Securities Act and distributing securities without a prospectus.

In outlining the investment scams, the panel said that Smith and his company showed “a pattern of deceit and disregard for securities regulatory requirements.”

“Their conduct is serious, they have harmed investors, and have damaged the integrity of British Columbia’s capital markets,’’ the panel said in its decision. “They are not fit to participate in our capital markets. We must also make orders that will have the appropriate deterrent effect.”

In December 1997, Smith pleaded guilty to 22 counts of theft over $5,000 and 10 counts of fraud and was sentenced by Ontario provincial court to two years less a day in prison for a scheme involving sales of limited partnership units in a proposed downtown Toronto residential real estate development. He and a company withdrew investors’ money before several of the deal’s conditions had been met and continued to sell units to other investors. Some 31 investors lost nearly $1.8 million. Smith also did not disclose the charges or convictions to the Ontario Securities Commission in 1997 and 1998, which subsequently permanently banned him and Synlan from the Ontario capital markets.

Around the same time, Smith and Synlan also formed three partnerships to raise money for residential developments in Arizona and Florida and sold partnership units to 14 BC residents. Smith held his own sales seminars and paid financial author and radio personality Brian Costello to promote the partnerships.

The homes were never built and the partnerships did not return the funds they collected from investors, who lost about $600,000.

The panel found that Smith engaged in deceit by leading investors to believe that promissory notes they each signed ranging up to about $135,000 would be paid off by the cash from the investment. The panel also determined that the investment terms violated the Securities Act because the approximately $25,000 required of each participating investor fell well short of the $97,000 minimum investment the law required of each investor. That minimum investment from each investor was necessary before Smith and his company could exclude themselves from regulatory requirements that they be registered to sell securities and file a prospectus.

Smith was also permanently prohibited from becoming an officer or director of any company issuing securities other than one he or his family solely owned and from engaging in investor relations activities.

The B.C. Securities Commission is an independent provincial government agency responsible for regulating trading in securities within the province. The decision can be accessed through the commission’s website www.bcsc.bc.ca or by contacting Communications Manager Michael Bernard at 604-899-6524.
-30-