A B.C. man has been ordered to pay over $1 million to the B.C. Securities Commission after a panel of adjudicators found he committed fraud and illegally distributed shares of a Fraser Valley hops farming company.
The administrative monetary order against Alexander William Bridges, also known as Alex Blackwell, and Fraser Valley Hop Farms Inc. (FVHF) includes $498,273 for the money obtained illegally and a $550,000 penalty for the misconduct — a substantial fine by commission standards.
“We think that considering all of the circumstances of Bridge’s fraud, including his conduct in continuing to raise funds from unsuspecting investors while he was busy spending invested funds on personal uses, the administrative penalty here should be at the top of the range identified by the executive director,” the panel ruled in its Jan. 25 decision.
The panel noted sanctions for similar and relatively recent cases of fraud have been between $300,000 and $500,000.
Bridges was also issued a permanent ban from further participation in the securities industry (such as being a manager, director, consultant or promoter of a company that issues shares).
According to the ruling, Bridges, the company’s sole director, and marketing director Shane Douglas Harder-Toews illegally solicited about $1.8 million from 18 investors starting in March 2016. The pair sold shares without a prospectus, a formal document providing details of an investment.
“The investors were misled about how their investment funds would be used. Investors were told that their funds would be used for the hops farm. In reality, Bridges and FVHF knowingly used $498,273 of their money for other purposes,” including personal uses, the panel stated.
For his misconduct, Toews — who was found by the panel to be a de facto company director — must pay an administrative penalty of $50,000 and is banned from participating in the public markets for six years.
Some investors reported life-altering impacts, such as “Investor XL” whose interaction with Bridges is summarized by the panel: “The loss of her investments had a big impact on her. At the time of the investment, she was going through divorce, had two young children, and her mother had cancer. She could not afford to buy a bigger home for her family, and the cash flow of her business suffered.”
The panel of Gordon Johnson, Jason Milne and Karen Keilty found no mitigating factors.
The commission says penalties act as deterrence to future frauds and cautions the public that monetary orders are more than likely to go unpaid as fraudsters may leave B.C. or have no money and assets, making collection difficult. The commission has, in recent years, been granted greater powers to collect, including the power to collect from pension funds and to block a person from renewing their driver’s licence.
Glacier Media was unable to contact the sanctioned parties; a website for the company is no longer operating.
