A B.C. Securities Commission (BCSC) panel ruled that a former investment advisor turned mining company CEO, his firm, and another man, illegally distributed securities by improperly relying on exemptions.
The BCSC announced today that a regulatory panel found that a mining firm, Cinnabar Explorations Inc., illegally sold shares to seven investors between April and July of 2011. It also ruled that its CEO, a former advisor, Christopher James G. Bass, (who was only registered between late 1986 and early 1987), along with its VP of communications, Dale Zucchet, violated securities rules by facilitating the distributions.
The regulator reports that the company, which has never filed a prospectus in B.C., claimed that the seven investors qualified under the family, friends and business associates and accredited investors exemptions. However, the panel found that they did not.
As a result, it ruled that the distribution was illegal. It also found that Zucchet made misrepresentations about the shares when he was soliciting investors by talking about Cinnabar going public, which it says wasn’t true.
A hearing on sanctions is scheduled for the week of Oct. 7. BCSC allegations are also still outstanding against another man who was a director of the firm, Daniel Grant McGee, and that hearing is scheduled for Dec. 4.