BCSC Fines Panamanian Investment Dealer $350,000 for Unregistered Trading

In a settlement agreement with the British Columbia Securities Commission (BCSC), Panama-based Verdmont Capital has admitted to trading securities on behalf of British Columbia (BC) residents without being registered.

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Unregulated

According to the BCSC, Verdmont traded securities on behalf of over 100 BC residents without being registered by the Commission between January 2010 and August 2013.

In May 2013, the BCSC discovered that Verdmont promoted its securities trading services through its website, but did not post any restrictions or limitations on Canadians opening accounts or using the advertised services. As such, the company did not take sufficient precautions not to trade on behalf of BC residents.

After requests from the BCSC in July 2013, Verdmont and Panamanian securities regulators provided information regarding over 100 Verdmont BC client accounts.

It was also noted that prior to the investigation, after determining that its BC client accounts were not in Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with BC securities laws, Verdmont began to freeze or close its client accounts. The company also added a disclaimer to its website prohibiting Canadian residents from opening accounts.

Verdmont has paid $350,000 in penalties to the BCSC to settle the case and is also permanently banned from trading in or purchasing any securities and from engaging in investor relations activities.

Verdmont consequently filed for liquidation in January 2016 and is now no longer operating.

Background

The BCSC is the independent provincial government agency responsible for regulating securities trading in British Columbia through the administration of the Securities Act. The regulator website provides information, tools and resources for investors, including investor warnings about individuals and companies that appear to be engaging in unauthorised activities.

This is the latest in a series of fines of varying amounts imposed by the BC regulator for conducting financial services activities without a license, or other violations of the law. The Commission last imposed a hefty fine of $15 million against a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term operator last August, as reported by Finance Magnates.