Medical device company’s officer and director admits to misrepresentations
Vancouver – A now-dissolved medical device company and its sole officer and director have paid $70,000 to the B.C. Securities Commission (BCSC) for misrepresenting aspects of the company’s finances, the status of its intellectual property and regulatory approval, and the ways it would use investors’ money.
The company, Lenis Medicals Ltd., and the officer and director, Hassan Seyed Salari of Vancouver, were developing a new technology for injecting medication.
Lenis raised about $1.9 million from 11 investors in 2018 using an offering document that contained several untrue material statements or omissions of material facts:
- It listed the device’s “Patent Value at Cost” as $4.3 million, even though no patent had been issued, and there was no reasonable basis for that cost value
- It said Lenis had liabilities of $270,000 but failed to disclose it had additional liabilities of about $1 million
- It said Lenis had initiated registration of the device with the U.S. Food and Drug Administration, even though Lenis had not filed any application or made any submissions to the agency to register the device, and
- It said the investments would be used on inventory and manufacturing components for commercialization of the device, but a portion of the proceeds were used for other purposes not disclosed to investors.
Salari must resign as a director or officer of any issuer or registrant (other than an issuer owned by his family’s trust). He is prohibited for seven years from:
- Becoming or acting as a director or officer of any issuer or registrant (other than the family trust-owned issuer)
- Becoming or acting as a registrant or promoter
- Acting in a management or consultative capacity in the securities or derivatives markets
- Engaging in promotional activities by or on behalf of an issuer, security holder or party to a derivative, or someone who is reasonably expected to benefit from the activities
- Engaging in promotional activities on his behalf that would reasonably be expected to benefit him, and
- Relying on any exemptions in the Securities Act.
Salari also will consent to orders of any other Canadian securities regulator that are based on the BCSC’s order.
About the B.C. Securities Commission (www.bcsc.bc.ca)
The B.C. 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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