A Vancouver-based man and his company have been banned for 10 years and will pay $200,000 to resolve allegations that they engaged in an abusive trading scheme in connection with a series of private placements.
The British Columbia Securities Commission (BCSC) approved a settlement with Cameron Robert Paddock and his company Rockshore Advisors Ltd. The company admitted to insider trading and abusive conduct when it purchased shares in six issuers through private placements and subsequently sold the shares at a loss. However, its costs in acquiring those shares was offset by consulting fees paid to the company by the issuers.
“Rockshore admitted that this pattern of activity was abusive to the capital markets,” the regulator said.
Additionally, in two cases, Rockshore was aware that most of the funds raised in the private placements would be paid out to consultants — a fact that was not disclosed to other investors. As the company traded with this inside information, it also engaged in insider trading, the settlement found.
The settlement stemmed from a case brought in 2018 by the BCSC alleging that a group of purported consultants — including Rockshore, known as the BridgeMark Group — and various issuers in the cannabis, cryptocurrency, mining and alternative energy sectors engaged in a scheme to exploit the consultant exemption to sell shares without a prospectus, while the “consultants” provided little or no services to the issuers.
The settlement with Rockshore and Paddock includes a 10-year prohibition from trading, advising, registration, engaging in promotional activity or relying on an exemption. They also paid $200,000 as part of the settlement.