About

News Release

Kamloops man gets lifetime market ban for defrauding investors

  • Date:

    2005-03-10
  • Number:

    2005/17

Vancouver – The British Columbia Securities Commission has found that a Kamloops man violated securities laws when he committed fraud and lied to investors in raising more than $2.3-million from individuals in the Kamloops area.

Ronald Stephen Barker has been permanently banned from trading securities, from being a director or officer of any issuer, and from engaging in investor relations activities. He must also pay an administrative penalty of $250,000. The commission has permanently cease-traded the securities of Double Eagle Investments Inc., the company that Barker used in raising money from investors. The commission has also ordered Barker and Double Eagle to pay more than $58,000 in costs related to the hearing.

The commission found that Barker violated securities laws when he traded and distributed securities without registration or a prospectus, or exemption from those requirements. He also acted as an investment adviser without being registered to do so.

Barker advised clients that an investment in Double Eagle was safe and suitable when he knew that this was not true. In some instances, he misled investors into believing that their money would be invested in a company that was in the business of corporate leases and financing, such as leasing equipment to dental offices. Instead, the majority of the funds were used for other purposes, including: unsecured business and personal loans, venture capital and stock market investments, and advances to himself and his companies, including a retail golf business that he owned and nightclub business in which he held a one-third interest.

In soliciting investments in Double Eagle, Barker promised that it was a “very safe investment” and “as safe as money in the bank,” even when he knew that Double Eagle had numerous non-performing loans and was in financial difficulty. In one case, he admitted that he advised an investor in her late sixties to invest $80,000 into the company when he knew Double Eagle was “going down the toilet.”

“The facts are that Barker knew that Double Eagle was not generating its target returns,” said the panel. “He knew he was relying on new shareholders to pay out existing shareholders.  He knew that many of Double Eagle’s loans and leases were in default.  He knew that most of Double Eagle’s business activities were inconsistent with how he was describing Double Eagle’s business to investors. He simply must have known that he was making misrepresentations.”

The panel also found that Barker acted fraudulently because he raised money from investors when he knew that it would be impossible for Double Eagle to generate returns for its shareholders’ investments and that their capital was at risk. 

The panel found that Barker enriched himself at the expense of investors by causing Double Eagle to advance $824,000 to himself and his companies. Barker failed to document loans and keep proper business records. He also failed to keep separate Double Eagle’s assets from his own and treated Double Eagle’s funds and other assets as if they were his own.

Between November 1996 and August 2002, Barker and Double Eagle raised over $2.3-million from 58 investors, with 57 of whom were B.C. residents mainly from the Kamloops area. Close to 75 per cent of that money – over $1.7-million – has been lost. 

“Through their serious misconduct, Barker and Double Eagle significantly harmed investors and damaged the integrity of British Columbia’s capital markets,” said the panel. “Their conduct shows they are not fit to participate in our capital markets. We must also make orders that will demonstrate the consequences of the conduct they exhibited, and that will have an appropriate deterrent effect.”

The B.C. Securities Commission is an independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box, Ronald Stephen Barker or 2005 BCSECCOM 146. If you have questions, contact Andrew Poon, Media Relations, 604-899-6880.