A British Columbia Securities Commission (BCSC) panel has found that B.C.-based HRG Healthcare Resource Group Inc. committed illegal distributions when it issued more than $4 million in securities to over 100 investors who did not qualify for prospectus exemptions.

The panel also found the company’s CEO, Daniel Mohan, and its founder, Alexander Downie, were partially liable for those illegal distributions. Both men were also directors of HRG.

The panel that Mohan violated securities laws in connection with distributions to 34 investors, totalling $1.7 million; and, that Downie was involved with distributions to 22 investors a little under $700,000.

BCSC staff had alleged that each of the three respondents in the case was liable for breaching securities laws by distributing $4.45 million in securities to 123 investors. However, the panel found that 14 of the investors did qualify for exemptions. It also found that the regulator’s staff didn’t prove the executives involvement with all of these transactions.

The panel concluded that: HRG breached securities rules involving 109 investors and over $4 million; Downie, as a director of HRG, is liable for those breaches; and Mohan is liable, as a director, in connection with distributions to 86 investors totalling almost $3.5 million.

In addition. the panel found that HRG filed 10 exempt distribution reports containing false information, and that Downie is liable for eight of them, while Mohan is liable for the other two.

The panel didn’t hand down any penalties in the case, ordering both sides to make submissions on sanctions next month.