News Release

BCSC panel dismisses fraud allegations against Silvercorp short-seller

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Vancouver – A British Columbia Securities Commission (BCSC) panel has dismissed fraud allegations against Jon Richard Carnes, the man who ran the “Alfred Little” financial blog. The panel also dismissed staff’s application for an order in the public interest.
In a notice of hearing issued December 19, 2013, BCSC staff alleged that Carnes perpetrated a fraud when he anonymously published a negative report about Silvercorp Metals Inc. which drove down its share price, and Carnes profited from a short position he held in Silvercorp shares.
Silvercorp is a mining company and reporting issuer with its head office in Vancouver, B.C. It has business operations in China, and its securities trade on the Toronto Stock Exchange and the New York Stock Exchange.
Staff also alleged that Carnes’ conduct was contrary to the public interest, and stated it was in the public interest for the commission to issue an order.
The notice alleged Carnes posted a report that contained numerous false statements, and omitted to state certain information, in relation to a mining expert’s report about Silvercorp. A central part of Carnes’ report and the expert’s report was the differences between Silvercorp’s Chinese filings and its North American regulatory filings for the company’s SGX mine in China. The Chinese filings had lower production, quality, and resource estimates than those stated in the North American regulatory findings.
In its decision, the panel dismissed the fraud allegations, stating that none of the statements or omissions “constitute a prohibited act for the purpose of fraud.”
You may view the decision on our website, www.bcsc.bc.ca, by typing Jon Richard Carnes or 2015 BCSECCOM 187 in the search box. You can find information about disciplinary proceedings 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 of Canada (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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