News Release

Vancouver – The B.C. Securities Commission has ordered the former head of a Kelowna-based medical products company to pay $100,000 and banned him from trading securities and key roles in companies for 10 years.

John Klippenstein, the former president, director and controlling shareholder of L.O.M. Medical International, Inc., breached securities laws when he raised over $2-million through LOM from 352 B.C. investors without being registered, filing a prospectus, or using an exemption. He also misrepresented to investors that the company’s securities would be listed and posted for trading on a stock exchange and would then trade at higher prices and that a product would be shortly manufactured by LOM for sale.

“The registration and disclosure requirements (including the prohibition against making a misrepresentation) are the heart of the investor protection regime in the [Securities] Act,” said the panel in rendering its decision. “The integrity of British Columbia’s capital markets is damaged when substantial sums are raised from investors in contravention of those requirements.”

The panel noted that Klippenstein conducted the illegal distribution of securities in B.C. while he was still under sanctions for similar illegal conduct in another jurisdiction.

“Klippenstein has demonstrated that he is a threat to the capital markets of British Columbia. When he began his activities in British Columbia, he was under sanction by another securities regulator for the same conduct. He knew there were regulatory requirements that applied to the sale of securities,” noted the panel.

“Nevertheless, he proceeded to sell securities in contravention of the Act. In addition, he made misrepresentations to investors both orally and in newsletters during the relevant period. This conduct shows an utter disregard for the Act, and that he is unfit to act as a director or officer of an issuer or to engage in investor relations activities.”

The decision also pointed out that Klippenstein and his family stand to receive in total about $820,000 from LOM – an amount equalled to about 40 per cent of the money raised from B.C. investors.

In addition to Klippenstein being prohibited from being a director or officer of any issuer or engaging in investor relations activities for 10 years, he must also pay $20,000 to cover costs related to the commission hearing.

The panel decided against sanctioning LOM, saying that to do so could interfere with any opportunity LOM shareholders may have to recoup their investment in the company.

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 Andrew Poon, Media Relations, 604-899-6880.