Nanotechnology company executive banned for 25 years for fraud and misrepresentation
Vancouver -- The head of a nanotechnology company who committed fraud when he issued news releases containing false or misleading information and sold shares has been ordered to pay a substantial fine and serve a lengthy market ban by the British Columbia Securities Commission.
Under the commission’s orders, Robert Papalia cannot act as a director or officer of any issuer, nor can he engage in any investor relations activities, for at least 25 years. He must also pay an administrative penalty of $75,000 (a sum which takes into account a fine imposed earlier by a U.S. court).
Papalia was a director and chairman of Nano World Projects Corp., and from December 2000 its chief executive officer. Nano World’s business was the development and commercial exploitation of nanotechnology. The Delaware-incorporated company had a B.C. business and mailing address and maintained a corporate office in Vancouver with support staff. Its shares were quoted on the U.S. Over-the-Counter Bulletin Board until Nano World was delisted in April 2001 for failing to file mandatory reports.
Earlier this year, a commission panel decided that Papalia and Nano World violated securities laws when Papalia, on behalf of the company, issued seven news releases between September 2000 and January 2001. These documents contained false or misleading information. Papalia lived in B.C. during this period.
Papalia reviewed and approved the issue of each of the seven news releases and he also directed or was fully involved in all the negotiations referred to in the releases.
In its June 22, 2005 decision, the panel found that the news releases contained false statements or omitted important facts about financing deals or financial backing, business partnerships, contract contingencies, or Nano World’s poor financial condition. The panel found that Papalia knowingly or recklessly put investors’ economic interests at risk by making the company look more valuable than it was.
In its sanctions decision, the panel concluded that Papalia poses a significant risk to investors and markets in B.C.
“His contraventions were serious. He is clearly unfit to hold a position of trust as a corporate director and officer and he should not be involved in investor relations. We must deter him, and others, from similar conduct,” said the panel.
The panel will examine more information and submissions from staff before awarding costs in this matter.
The B.C. Securities Commission is the 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, Robert Papalia or 2005 BCSECCOM 648. If you have questions, contact Andrew Poon, Media Relations, 604-899-6880.