The two principals behind the issuance of more than $13 million of securities for B.C. Securities Act breaches have been barred for trading for 12 years and each ordered to pay the B.C. Securities Commission $37,500.

The BCSC said today it has reached a settlement with Mark Cramer and his son, Michael Cramer, for breaches that include not resolving conflicts of interest and selling unsuitable investments to clients, including interests in a cattle ranch in northern B.C.

In addition under the settlement, the two Cramers may only trade for their personal accounts, and should they sell securities they must turn over the proceeds to the commission, up to $250,000. They are also severely limited in engaging in investor relations activities and acting as an officer or director of a business.

The Cramers were the directors and registered representatives at the securities dealer IDF Financial Services Inc. in Prince George, B.C. They admitted selling clients securities when their personal interests conflicted with their duties to clients. The conflicts arose because they were the “directing minds” behind issuers whose securities they were selling to clients.

Further, the pair admitted that they participated in illegal distributions of these securities and that these securities were unsuitable for clients, given the clients’ risk tolerance and investment goals.

They also agreed they made misrepresentations in selling securities to clients. For example, in the younger Cramer’s case, he claimed that some securities would become publicly traded on a stock exchange when that listing was not yet a certainty.

In making the orders against the pair in the settlement, the BCSC took certain mitigating factors under consideration, including that the pair are insolvent.
The pair was among 10 individuals who worked at IDF named in a notice of hearing issued in 2001. Seven IDF brokers settled with the commission in August 2001, made payments to the commission and agreed to strict supervision if they seek registration to sell securities in B.C. again. An eighth broker settled with the commission in May 2003.