The B.C. Securities Commission has found that an Internet-based investment club and its backers violated the Securities Act by committing fraud and selling securities without being registered.

As well, Tri-West Investment Club breached the Securities Act by distributing securities without filing a prospectus.

The commission panel also found that John Byron, a B.C. resident, traded in the securities of Tri-West and advised other B.C. residents to purchase the securities without being registered and committed fraud in connection with these activities in violation of the Securities Act.

The commission will rule on sanctions after hearing further from the parties in November.

The panel found that the “Tri-West program appears to be a quintessential example of what has come to be known world wide as a ‘Prime Bank Instrument Fraud’.”

“Prime bank instrument frauds claim to involve the purchase and sale of fully negotiable bank instruments. These bank instruments are purported to be the debt obligations of the top, or prime, world banks. In fact, neither these instruments, nor the markets on which they allegedly trade, exist,” said the panel.

The commission noted that several international organizations and law enforcement agencies have issued warning circulars and bulletins about prime bank instrument schemes.