B.C Securities Commission alleges illegal distributions and unregistered trading
Vancouver – The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a former investment advisor distributed securities without being registered and without having filed a prospectus.
The notice alleges that Robert Waters, a B.C. resident, promoted securities in Berkeley Coffee and Tea Inc. in anticipation of future compensation from the company. Waters was formally registered under the Act as an investment advisor from March 6, 1985, to September 9, 1998.
The notice states that on April 1, 2011, Berkeley distributed shares to 59 investors, raising a total of approximately CAD $474,590.00. Waters was responsible for 45 of the investors, for proceeds totalling approximately CAD $312,976.70. Berkeley, an Over-the-Counter reporting issuer in B.C., had previously filed a prospectus with the U.S. Securities and Exchange Commission, but never in B.C.
On May 6, 2011, Berkeley filed an exempt distribution report with the BCSC, claiming the securities had been sold under the family, friends and close business associates exemption. As Waters has never been a director, officer, or founder of Berkeley, none of the investors for whom Waters was responsible qualified for an exemption.
BCSC staff contend that by distributing shares without a prospectus and without being registered, Waters breached securities laws.
Berkeley and Sean Tan have settled with the executive director, admitting that they distributed these securities without having filed a prospectus, contrary to section 61 of the Securities Act (2012 BC SECCOM 424).
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 January 22, 2013 at 9:00am.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Robert Waters, Berkeley Coffee and Tea Inc. or 2012 BCSECCOM 466 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).
For media inquiries, please contact Richard Gilhooley, media relations, 604-899-6713. For public inquiries, please call 604 899 6854 or 1 800 373 6393 (toll free).
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