By James Langton
(April 19 – 15:40 ET) – The Securities and Exchange Commission is lauding the Supreme Court of British Columbia for a decision supporting a U.S. court order. The decision may help the SEC recover money that has been funnelled through Canada after being fraudulently obtained in the U.S.
A New York court granted a US$779,971 disgorgement order against Robert Cosby in 1996. The SEC had charged Cosby, a former president of Softpoint, with defrauding its shareholders for US$636,928. Cosby didn’t pay and, instead, fled the country.
In 1998 a grand jury indictment was entered against Cosby for money laundering in absconding with the funds.
On January 16, 1999, Cosby was stopped at Vancouver International Airport trying to enter Canada from Hong Kong. The RCMP found him carrying US$100,000 in cash. They seized the money and returned him to Hong Kong.
On April 22, 1999, the SEC filed in B.C. Supreme Court, seeking enforcement of its judgement. Cosby opposed the SEC on the basis that the judgement is”penal” in nature and therefore not enforceable in B.C. The court rejected his argument. On July 16, Hong Kong authorities arrested Cosby and began extradition proceedings.