News Release

Vancouver – The executive director of the British Columbia Securities Commission has issued a temporary order and notice of hearing against two Burnaby residents and an unregistered Burnaby company alleging that they were running an Internet-based Ponzi scheme.

The executive director issues temporary orders in situations where the length of time required to hold a hearing could be prejudicial to the public interest.

The notice of hearing says that the BCSC received two anonymous complaints stating Bossteam E-Commerce Inc. was operating a Ponzi scheme through a website registered to Yan Zhu (a.k.a Rachel Zhu), a registrant and life insurance agent, and her husband. Zhu is also director of Bossteam E-Commerce.

The notice says the Bossteam E-Commerce website offered two types of securities to B.C. residents, who paid $2,000 or $5,000 for a membership. In an interview, Zhu’s husband told investigators that the company had no real source of income, and that funds paid to investors came from the investment monies of other investors.

In October and November 2011, Bossteam E-Commerce opened two bank accounts in the name of Zhu and Guan Qiang Zhang, a Burnaby resident. From October 2011 to January 2012, the accounts received numerous deposits for $2,000 to $5,000, which totalled Cdn $688,746.15 and US $590,527.26.

The notice alleges, among other things, that Zhu lied to commission investigators when she denied involvement with another website registered to her and her husband, and that she falsely claimed she had told her mutual fund dealer employer about her outside business activities with Bossteam E-Commerce.

Based on the evidence gathered to date, the notice alleges that Zhu, Zhang, and Bossteam E-Commerce appear to have illegally distributed securities and perpetrated securities fraud. The investigation is ongoing.

The temporary order prohibits trading in Bossteam E-Commerce securities and orders Zhu and Zhang to cease all investor relations activities on behalf of Bossteam.  It expires on May 15, 2012.

These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on May 15, 2012 at 9:00 a.m.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Yan Zhu, Guan Qiang Zhang, Bossteam E-Commerce, or 2012 BCSECCOM 143 in the search box. 

Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.

Please visit the Canadian Securities Administrators’ Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).

For media inquiries, contact Richard Gilhooley, media relations, 604-899-6713. For public enquiries, call 604 899 6854 or 1 800 373 6393 (toll free).

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