News Release

Vancouver – The Executive Director of the British Columbia Securities Commission has issued a notice of hearing alleging that a tech company specializing in hospital entertainment systems and two Vancouver men engaged in an illegal distribution of securities.

The notice alleges that between December 2010 and March 2012, HRG Healthcare Resource Group Inc., Alexander Downie, and Daniel G. Mohan distributed over $5.6 million of HRG securities to 149 investors. Of this amount, approximately $4.5 million was raised from 129 investors without an exemption from securities laws concerning prospectus requirements.

BCSC staff contends that Downie and Mohan actively promoted HRG securities by participating in meetings and marketing presentations with potential investors. In addition, Downie designed HRG promotional materials and provided regular updates to investors. Downie is a director and founder of HRG, and Mohan was a director and chief executive officer of HRG. Neither have ever been registered to sell securities in B.C.

Staff alleges that during the relevant period, HRG filed 13 exempt distribution reports with the commission, which included 67 investors for a total of $2.1 million. Downie and Mohan signed these reports as HRG’s authorized signatories.

HRG purported to rely on the Family, Friends and Business Associates and Accredited Investor exemptions for the investors included in its filed exempt distribution reports. However, of the 67 investors, the exemptions claimed for at least 31 investors who invested approximately $988,000 were not available. Furthermore, despite being required to do so, HRG failed to disclose in the exempt distribution reports that it paid agents at least $329,700 in commissions for their fundraising activities.

BCSC staff maintains that HRG, Downie, and Mohan breached securities laws regarding prospectus and reporting requirements, and that Downie and Mohan authorized, permitted or acquiesced in HRG’s contraventions as officers and directors of the company.

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 August 19, 2014, at 9:00 a.m.

You may view the notice of hearing on our website, www.bcsc.bc.ca, by typing HRG Healthcare Resource Group Inc., Alexander Downie, Daniel G. Mohan, or 2014 BCSECCOM 212 in the search box. Information about 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 of Canada (MFDA).

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

• A securities market that is fair and warrants public confidence

• A dynamic and competitive securities industry that provides investment opportunities and access to capital

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Media Contact:
Richard Gilhooley, Media Relations
604-899-6713

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