BCSC sanctions second man in consulting sham

A second man has been sanctioned for his role in a private placement scheme that regulators have determined was abusive.

Last month the British Columbia Securities Commission (BCSC) settled with a West Vancouver man and two of his companies for engaging in a scheme that involved exploiting the prospectus exemption for consultants. Now, the BCSC has settled with another man and his companies for similar misconduct.

A regulatory hearing panel approved a settlement with Anthony Kevin Jackson and his companies, BridgeMark Financial Corp. and Jackson & Company Professional Corp., who admitted to engaging in conduct that violated the public interest.

According to the settlement agreement, Jackson and his companies entered consulting arrangements with several issuers, which raised over $50 million in private placements combined.

However, the companies kept less than $8 million of that money, with the rest being paid in fees to the purported consultants, who didn’t do any real consulting work, the regulator alleged.

Instead, they purchased shares in the private placements, which they sold almost immediately at prices below the private placement price.

“Jackson met with some of the issuers to explain the consultant exemption that the issuers relied on to make the private placement shares freely tradable, and he facilitated the delivery of paperwork, including subscription agreements, consulting contracts and private placement cheques for some of the issuers,” the BCSC said in a release.

In settling the regulator’s allegations, Jackson and his companies acknowledged that their conduct “engaged the commission’s public interest jurisdiction and that it was necessary to make orders against them,” the BCSC said.

Under the settlement, they agreed to be banned from using the consulting exemption for eight years, from advising or consulting for five years, from trading for three years, and from registration for two years. They also agreed to pay a combined $100,000.

In a previous settlement, the sanctions for similar misconduct included a 10-year ban and a $950,000 monetary sanction.