A former corporate officer and director has been sanctioned in a settlement with the British Columbia Securities Commission (BCSC) for raising money from investors using misleading offering documents.
The executive director of the BCSC approved a settlement with Hassan Seyed Salari and his company, Lenis Medicals Ltd., for securities violations.
According to the settlement, the company raised almost $2 million from investors in a private placement with offering documents that misrepresented the company’s financial condition, its intellectual property and the status of U.S. regulatory approvals.
For instance, the company, which purported to be developing new medical injection technology, told investors it had a patent for its technology worth $4.3 million when no patent had been issued.
It also claimed to be seeking registration for the device with the U.S. Food and Drug Administration but hadn’t filed any applications, and it understated its liabilities by about $1 million.
In settling the case, Salari agreed to a seven-year market ban, and he was fined $70,000, along with the now-dissolved company.
The settlement noted that Lenis was acquired by an Arizona-based company. As a result of that deal, investors got shares in the acquiring company or were repaid.
Correction: This article has been updated to state that the executive director of the BCSC approved the settlement, not a hearing panel.