Regulators in Alberta have ordered four-year director and officer bans against a mortgage broker, and her husband, for illegally disturbing securities in a real estate lending firm.
The Alberta Securities Commission said Tuesday that an ASC hearing panel ordered that mortgage broker, Deborah McKenzie, and her husband, Christopher McKenzie, be prohibited from acting as a director or officer until Dec. 19, 2018; and, that they each pay a monetary penalty of $60,000 along with $5,000 in costs, after they admitted to conduct that the panel found violated the public interest.
According to the ASC panel’s decision, the couple illegally traded and distributed securities of Infuse Capital Corp., a company they jointly owned, which lends money to real estate projects. It also found that they made misrepresentations to investors.
The panel noted that the couple didn’t understand that raising about $2 million through the sale of debentures violated securities laws. The company raised another $6 million in the exempt market that complied with the law. However, the panel also said that it “cannot condone ignorance of the law”.
Additionally, the panel found that investors were not fully informed about the company’s use of the proceeds raised in the sale of the unregistered securities. “Misrepresentations put the investing public in harm’s way by inducing them to purchase securities based on inaccurate information; adverse outcomes from misinformed investments can undermine confidence in our capital market,” the panel said in concluding that they violated the public interest.
That said, the panel also found that the couple are likely “not scofflaws who present a serious risk of future harm”. Instead, it suggested that they had learned a lesson and “will be vigilant in the future to ensure that they comply with Alberta securities laws.”