News Release

Vancouver – A British Columbia Securities Commission (BCSC) panel has sanctioned HRG Healthcare Resource Group Inc., Alexander Downie, and Daniel G. Mohan for illegally distributing securities. Downie was a director and founder of HRG, and Mohan was a director and chief executive officer of HRG. Neither has ever been registered to sell securities in B.C.

HRG was in the business of developing and commercializing a web-based, bedside medical records and entertainment system for patients in hospitals. In August 2015, the panel found that the company breached securities laws concerning prospectus requirements when it distributed $4.009 million in securities to 109 investors. Downie and Mohan were also found to have directly breached securities laws concerning prospectus requirements: Downie with respect to distributions to 22 investors for a total of $693,500, and Mohan with respect to distributions to 34 investors for a total of $1,709,850.

The panel also found Downie and Mohan liable for HRG’s illegal distributions. Downie is liable for the full $4.009 million raised from 109 investors, while Mohan is liable for $3.48 million raised from 86 investors (Mohan’s liability was limited to the distributions that took place during the time he was a director and senior officer of the company). Downie and Mohan were also found liable for ten Exempt Distribution Reports (EDRs) filed with the BCSC that were proven to have contained false information. Downie signed eight of these reports, and Mohan signed two of them.

In its sanctions decision, the panel discussed the negative impact to investors: "The respondents raised $4.45 million from 123 investors. All of the investors in HRG have lost their investments. Oral testimony and written victim impact statements from investors provided evidence that the financial loss to investors has been significant and those losses have had an impact on financial and other plans."

The panel ordered that Mohan pay to the BCSC the $103,530 he received in commissions for his role in HRG’s capital raising efforts, as well as an administrative penalty of $75,000. He was ordered to resign any position he holds as a director or officer of any issuer or registrant, and he is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of seven years. He is also banned, for the same period, from trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.

The panel ordered Downie to pay an administrative penalty of $75,000 and resign any position he holds as a director or officer of any issuer or registrant. He is prohibited from becoming or acting as a director or officer of any issuer or registrant for a period of seven years. Downie is also banned, for the same period, from trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.

The panel ordered that HRG be permanently cease-traded.

In a dissenting sanctions decision, Commissioner Audrey Ho found that it would have been appropriate to order HRG, Downie and Mohan to pay to the BCSC the amount obtained from their contravention of the Securities Act, being the sum of $3,481,000 on a joint and several basis. Commissioner Ho also found that it would be appropriate to order HRG and Downie to pay to the BCSC the sum of $528,000 on a joint and several basis.

You may view the findings decision on our website www.bcsc.bc.ca by typing HRG Healthcare Resource Group Inc., Alexander Downie, Daniel G. Mohan, or 2016 BCSECCOM 5 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).

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
mediarelations@bcsc.bc.ca

Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)
inquiries@bcsc.bc.ca

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