A New Brunswick man has paid $24,000 as part of a settlement agreement with the New Brunswick Securities Commission (NBSC), over a loan arrangement that it found amounted to selling securities.

The NBSC said that Andrew Trites of Irishtown, N.B. has paid the money as part of a settlement reached on July 17, which included an administrative penalty of $10,000, $12,000 in disgorgement, and $2,000 in costs. He also lost access to securities law exemptions for five years.

The settlement came in the wake of an investigation by the NBSC, which found that Trites was paid sales commissions for his role in securing $1.8 million in loans from four New Brunswick individuals. The loans were secured with promissory notes issued by a former Moncton area man, James MacCallum, now of Jamestown, N.Y. and Andrew Mitchell Holdings, LLC., a company controlled by MacCallum.

The loan arrangements amounted to securities transactions, the NBSC says. “If you have been asked to loan money to someone who has promised you a return because they are investing that money, it is a securities transaction,” said Rick Hancox, executive director with the NBSC.

Trites has never been registered with the commission to trade in securities, the NBSC reported. It also noted that he co-operated with the investigation, and that there were mitigating factors, including that Trites didn’t know his actions were in violation of securities laws, he accepted responsibility for his actions, and has paid the consequences.

The $12,000 in disgorgement is to be repaid to investors, and represents the sales commission he was paid for his role in securing certain loans.

“New Brunswickers should know that individuals who are soliciting their money and using that money for investment purposes, must comply with New Brunswick securities laws,” Hancox said; adding, “And, loaning large sums of money for investment purposes is an inherently risky activity. Only those who have the professional skills to be able to evaluate the borrower’s credit situation; and review, understand and confirm financial statements of the borrower should be involved in this market.”