The perpetrators of an illegal distribution case have been hit with $56 million in fines and disgorgement, along with lifetime bans, the British Columbia Securities Commission (BCSC) announced on Monday.

A BCSC panel has fined and ordered bans against Yan Zhu (also known as Rachel Zhu) and Guan Qiang Zhang, two former residents of Burnaby, B.C. The panel also fined and permanently cease-traded Bossteam E-Commerce, a company co-founded by Zhu and Zhang and used in the illegal distribution.

The panel ordered $14 million fines against both Zhu and Zhang. Additionally, Bossteam and the couple were each ordered to disgorge the $14 million raised illegally. They were also permanently banned from securities markets.

In August last year, the panel found that Zhu, Zhang, and Bossteam committed fraud, illegally distributed securities, and withheld information from BCSC investigators.

See: Former fund rep committed fraud: BCSC

“The respondents’ misconduct is at the most serious level. The respondents carried out large-scale fraudulent illegal distributions of securities of Bossteam to hundreds of investors for proceeds in excess of $14 million,” the panel stated in its sanctions decision.

“They then attempted to conceal or withhold information from commission investigators and withheld information in response to an order for production. Zhu also gave false information to a commission investigator,” the panel added.

The respondents sought shorter bans and smaller monetary sanctions in the case. Zhang should only be banned 10 years, they argued, and Zhu should only face five years, because she is less culpable than Zhang. In addition, they argued that the appropriate fines would be $275,000 for both Zhang and Bossteam, and $50,000 for Zhu.

However, the panel sided with the BCSC staff. “Given the magnitude of the fraudulent illegal distributions they carried out through Bossteam in a few short months, their other contraventions of the Act and their continuing failure to acknowledge any wrongdoing, we consider it is appropriate to assess the administrative penalty for each of Zhu and Zhang in an amount approximately equal to the known amount raised. We order that each of them pay an administrative penalty of $14 million,” the panel stated.