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BCSC wins two legal victories in efforts to collect financial sanctions

  • Date:

    2021-03-31
  • Number:

    2021/19

Vancouver – The British Columbia Securities Commission (BCSC) has won two legal victories in their efforts to collect $40.7 million in financial sanctions. 

On March 26, 2021, the British Columbia Supreme Court ruled that Thalbinder Singh Poonian and Shailu Poonian will never be discharged from their debts to the BCSC by bankruptcy.

In 2018, a BCSC panel ordered the Poonians to pay a combined $13.5 million in administrative penalties for committing market manipulation, plus a combined $5.5 million disgorgement of their ill-gotten gains. The Poonians have not paid any portion of those sanctions.

The sanctions stem from a 2015 decision by the BCSC which found that the Poonians manipulated the share price of OSE Corp., an Ontario company whose shares traded on the TSX Venture Exchange. The panel concluded that the Poonians inflated the share price through back-and-forth trading among themselves, along with relatives, friends and acquaintances, and then illegally obtained approximately $7 million by selling OSE shares to unsuspecting buyers.

The March 2021 Supreme Court judgement states “the Poonians’ actions were morally unacceptable and harmful to society, such that they should not be rewarded with a release of those debts.” As a result, the court agreed their debts owed to the Commission will survive bankruptcy under the Bankruptcy and Insolvency Act.

In a separate proceeding in April 2020, the B.C. Supreme Court also denied an attempt by the Poonians to be discharged from their bankruptcy. The Poonians are appealing this decision.

Meanwhile, on March 18, 2021 the Supreme Court of Nevada denied Michael Lathigee’s petition for a rehearing into its December 2020 decision, which upheld the BCSC’s efforts to collect $21.7 million from the fraudster. The Court agreed with the Nevada state judge’s recognition of the BCSC order, giving the BCSC the right to pursue his assets in that state.

A BCSC panel found in 2014 that Lathigee, a former Vancouver resident who moved to Las Vegas, fraudulently raised millions of dollars from investors without telling them about the financial condition of companies he controlled. He also used the money to make loans to related companies, instead of investing the funds in foreclosures of residential properties.

In addition to a $15 million administrative penalty and a permanent ban from trading in securities in B.C., the panel ordered Lathigee to pay $21.7 million in disgorgement, representing the amount of money he and Earle Douglas Pasquill obtained from their misconduct.

“Both of these cases show the lengths to which wrongdoers will go to avoid paying the debts they owe the Commission,” said Peter Brady, the BCSC’s Executive Director. “But we work tirelessly to collect those financial sanctions so we can return money to investors and deter others from breaking securities laws. We’re pleased with these decisions because they mean we can continue with our collections efforts.” 

In 2020, landmark changes to the Securities Act gave the BCSC some of the strongest powers in the country to collect financial sanctions.

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

Media Contact:
Elise Palmer
604-899-6830

Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)
inquiries@bcsc.bc.ca

Learn how to protect yourself and become a more informed investor at www.investright.org