Court rules in favour of labour-sponsored venture fund against fund manager

The first ever jail sentence in a “pump-and-dump” case in Alberta has been handed down in connection with a market manipulation scheme that was carried out in 2010, the Alberta Securities Commission (ASC) reports.

According to the ASC, Caroline Meyers has been ordered to spend two years in prison after pleading guilty to various charges, including acting as a securities dealer without registration, not filing a prospectus and manipulating the price of Coastal Pacific Mining Corp. securities. She is also permanently banned from the securities markets in Alberta.

The co-accused in the case, Joseph Bucci, pled guilty to the same charges and received an 18-month conditional sentence along with a permanent market ban. Bucci was the first person to receive a court sentence in a “pump-and-dump” case in Alberta, and Meyers is the second, although she’s the first to receive jail time.

When Bucci was sentenced in September 2015, the ASC said that it agreed to a conditional sentence recommendation due to his “serious health issues.”

“Penny stock fraud is a serious and growing problem in North America, undermining the integrity of our capital markets and inflicting tens of millions of dollars in damage to unsuspecting victims,” said Cynthia Campbell, director enforcement with the ASC, in a statement.

“These activities create artificial demand by distorting the price of shares through falsehoods and exaggerations of company success,” she added. “Perpetrators cash in on the falsely inflated prices, halt the misinformation and watch as the share price comes crashing to the ground. Innocent purchasers are left holding essentially worthless shares.”

Meyers, who headed Calgary-based International Securities Group Inc., recently returned to Canada from the U.S., where she also spent time in jail “for similar misconduct” involving different securities, the ASC notes.

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