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A British Columbia court has approved a $2.4-million class action settlement in a case involving a deceptive private placement scheme.

The Supreme Court of B.C. certified a proposed class action and approved a settlement against certain defendants, including Beleave Inc. and a pair of its officers, who were accused of participating in an investment scheme that involved “purported consultants” acquiring shares via private placement on false pretences.

The plaintiffs alleged that the arrangement caused damages to investors who acquired shares in subsequent offerings.

The court noted that the proposed class action arose from an investigation by the B.C. Securities Commission (BCSC) into the private placements, which resulted in a settlement with Beleave in 2019 that saw the firm admit to abusive conduct. However, the BCSC didn’t order any sanctions against Beleave, citing the firm’s response to the allegations and efforts to correct its public disclosure, among other factors.

According to the court, Beleave entered bankruptcy protection in June 2020. The company’s insurer negotiated the resolution with the plaintiffs, which, in addition to the monetary settlement, also requires the corporate officers to cooperate with continued litigation against various other companies and individuals.

In approving the settlement, the court said that the financial payout was significant, given the risk of undergoing a trial and Beleave’s depleted resources. Additionally, cooperation by the company’s officers “is a significant non-monetary benefit,” the court said.

Ultimately, the court ruled that the proposed settlement was “fair and reasonable and in the best interests” of affected investors.