The Alberta Securities Commission (ASC) fined and permanently banned a man, after finding that he illegally distributed securities and made misrepresentations to investors in a failed proprietary trading scheme.
A hearing panel of the ASC ordered Shane Courtney Ward to pay $305,100 in monetary sanctions, including a $100,000 penalty, $106,000 in disgorgement, and almost $100,000 in costs.
The sanctions follow a finding that Ward illegally distributed securities of his unregistered investment business, Engineered Wealth, and misled investors about the safety of their investments and their expected returns.
According to the regulator, Ward raised over $500,000 from investors, which he was to trade on their behalf. The venture was initially structured as an unregistered, private investment fund, but was later changed into a promissory note structure.
Ultimately, the firm failed, “and nearly all investors lost their funds and received no returns on their investments,” the ASC noted.
While the panel concluded that Engineered Wealth wasn’t just a sham or a Ponzi scheme, it found that Ward misappropriated over $100,000 of investors’ funds.
“While bordering on lenient … we are satisfied that an administrative penalty of $100,000 is proportionate to the circumstances of the misconduct and its perpetrator,” the panel said in its decision.
“There must be a direct financial consequence in addition to the removal of the financial benefit Ward wrongfully obtained to reflect the seriousness with which misconduct of this nature — especially fraud — is viewed by the ASC, address the risk and protect against similar misconduct in the future, and preserve public confidence in our capital market,” it said.
It also imposed a permanent ban, saying it has “concluded that because of the seriousness of Ward’s misconduct, the personal benefit he obtained, the harm he caused to specific investors and to the capital market in general, and his flagrant disregard of the legal advice he received cautioning him against his activities, Ward presents an ongoing risk and cannot be trusted to comply with Alberta securities laws in the future.”