A handful of investors who lost over $500,000 by trading with an unregistered advisor will be sharing less than $40,000 that was paid under a settlement with the British Columbia Securities Commission (BCSC).
In 2021 a former mutual fund rep, Shijun “Clark” Zhu, admitted he violated securities regulations by engaging in unregistered trading and advising when he entered agreements with five investors to trade on their behalf.
The investors entrusted over US$500,000 to Zhu in 2016, and by 2018 virtually all their money had been lost, the BCSC alleged.
Zhu, who was last registered as a mutual fund rep in 2012, admitted that his unregistered trading activity contributed to the investors’ losses.
In settling the regulator’s allegations, he agreed to a 10-year trading and registration ban, and to pay a $40,000 penalty (representing the amount he was paid in commissions generated by his illicit trading).
“The funds will be divided up among four investors who lost money as a direct result of Zhu’s misconduct and who submitted a claim after the BCSC had published a notice about the availability of funds,” the regulator said.
“Since the funds are insufficient to pay the investors’ claims in full, the panel ordered that the money — together with accrued interest — be divided on a prorated basis,” it said.