BCSC panel issues lifetime ban against B.C. man for fraud and fines him $2 million
Vancouver – A British Columbia Securities Commission panel has permanently banned a B.C. man from the province’s capital markets for fraudulently enticing investors to invest in a company he claimed was developing a recreation and ski resort.
The panel found that Ronald Stephen McHaffie and BigFoot Recreation & Ski Area Ltd. raised approximately $642,960 from 30 investors through the sale of shares in BigFoot. BigFoot was incorporated in B.C. in 2003, purportedly to develop a recreation and ski area near Jones Lake in B.C. BigFoot has never filed a prospectus in B.C., and McHaffie has never been registered to sell securities in B.C.
The panel found that, through the sale of shares in BigFoot, McHaffie committed a fraud. In that regard, McHaffie made false statements to entice investors, such as telling them that their investment would be used for expenses related to getting BigFoot publicly listed, and that construction or completion of the ski resort was imminent. These statements were false, as McHaffie used investor funds to pay for personal expenses, including gas, restaurants, groceries and retail purchases, not for expenditures related to taking BigFoot public. Furthermore, although BigFoot’s ski resort proposal was rejected by the provincial government in September 2010, McHaffie continued to raise a total of $111,070 from investors after that date.
The panel found that Bigfoot’s distribution of shares to 27 of the 30 investors for proceeds of $621,960 contravened the prospectus requirements in the Securities Act. The panel found that McHaffie also contravened the Act because, as a director of BigFoot, he authorized, permitted and acquiesced in the company’s contravention.
The panel cease-traded Bigfoot. The panel permanently prohibited McHaffie and BigFoot from trading or purchasing securities or exchange contracts, from acting as a registrant or promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market. The panel permanently prohibited McHaffie from acting as a director or officer of any issuer or registrant.
The panel also ordered the respondents to pay to the commission disgorgement of the $642,960 they obtained as a result of their contraventions of the Securities Act, and ordered McHaffie to pay an administrative penalty of $2,000,000.
You may view the sanctions decision on our website (www.bcsc.bc.ca) by typing Bigfoot Recreation and Ski Area Ltd., Ronald Stephen McHaffie, or 2014 BCSECCOM 213 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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Richard Gilhooley, Media Relations
604-899-6854 or 1-800-373-6393 (toll free)
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