A venture that promised to help Chinese citizens immigrate to Canada by facilitating investments in Canadian businesses created an investment contract that required a prospectus, according to a settlement between two companies and the Nova Scotia Securities Commission (NSSC).
A regulatory hearing panel approved a settlement with Beringco Int’l Group Inc., Atlantic Resource Partnership Inc., and their sole director and officer, Yi Hu, to resolve allegations they violated securities rules in connection with an immigration scheme.
According to the regulator, the companies and Hu breached securities rules in an arrangement to facilitate investments in Nova Scotia-based businesses, purportedly to aid the immigration process. This created an investment contract, it said — but they didn’t file a prospectus or seek an exemption and they weren’t registered.
As part of the settlement, they admitted to distributing securities without registration, misleading an investor and treating the investor unfairly in connection with the promised investments.
Under the agreement, the companies and Hu were banned for five years and agreed to pay an administrative penalty of $170,000 along with $7,500 in costs.
“Prospectus filings and other disclosure requirements are paramount to ensuring investors receive essential information to make informed investment decisions,” said Ibrahim Badawi, enforcement counsel for the commission, in a release.