A private Swiss bank has agreed to a permanent trading ban and an $850,000 monetary sanction after admitting that it engaged in unregistered offshore trading for investors in British Columbia.

The B.C. Securities Commission (BCSC) said Wednesday has settled with Bank Gutenberg AG, Gutenberg Management AG, and Gutenberg Group AG, concerning allegations that it violated registration requirements by trading securities on behalf of B.C. residents. In settling the case, the firms admitted that they breached securities laws, and they consented to permanent bans on trading and engaging in investor relations activities. They also agreed to pay $850,000 to the commission, including $50,000 for the cost of the investigation.

According to the settlement, Bank Gutenberg serviced accounts of several offshore corporations where at least one of the beneficial shareholders were residents of B.C. The agreement indicates that before accepting these accounts the bank “took steps to ensure that the beneficial owner had no power of attorney over the account or signatory rights for the company”. Yet, commission staff found that, despite this structure, at least two B.C. residents that had accounts in the names of offshore corporations directed the firm to trade in issuers listed on the TSX Venture Exchange through their Bank Gutenberg accounts.

The commission says that its staff suspect there may be other B.C. residents who directed trading through offshore corporations, but that they cannot confirm this because they don’t have access to the bank’s records. In total, approximately $327.8 million worth of trading was carried out in 16 accounts held in Bank Gutenberg’s name held at six different brokerage firms in Vancouver.

The settlement indicates that Bank Gutenberg admits that it breached securities laws by soliciting trades through its website without prominently displaying a disclaimer identifying the foreign jurisdictions in which an offering or solicitation is qualified; by not taking all reasonable precautions not to sell to B.C. residents; and, by trading in B.C, issuers on behalf of B.C. residents without being registered, or taking all reasonable precautions not to allow B.C. residents to control this trading.