A pair of real estate developers have been ordered to pay more than $4 million in fines and disgorgement in connection with an illegal distribution, albeit in a split decision, by a hearing panel of the British Columbia Securities Commission (BCSC).
The regulator announced Wednesday that a hearing panel has sanctioned two men, Michael Jerome Knight and Jeffrey Karl Weigel, and several companies for illegally distributing securities.
The hearing panel ordered the pair to disgorge $3.625 million, the monies obtained as a result of their misconduct, to the commission. Knight was also fined $300,000 and permanently banned from trading in securities, or becoming a registrant. Wiegel was ordered to pay a $100,000 administrative penalty and was banned for 10 years.
Knight, who worked as a mutual fund rep back in the early 90’s, was also sanctioned for fraud and breaching an order prohibiting him from engaging in certain conduct in B.C.’s capital markets (back in 2004, Knight was banned from trading and investor relation activities for three years).
Last September, the panel found that between October 2006 and August 2010, Knight, Wiegel, and several firms were involved in selling securities without a prospectus and without being registered. In one instance, it found that they raised approximately $1.9 million, and in the other they raised approximately $1.7 million.
See: Former fund rep committed fraud: BCSC
One of the panel members issued a dissenting sanctions decision. BCSC vice chair, Nigel Cave, found that the disgorgement order was not warranted, as the evidence did not establish that Knight and Wiegel benefited from the amounts obtained through their misconduct.