The British Columbia Securities Commission (BCSC) has issued a temporary order and notice of hearing against three men and a B.C.-based company over concerns about unusual trading volume and share price increases.
The temporary order bars all trading or transferring of the shares of Forum National Investments Ltd, a B.C. reporting issuer whose shares trade on the Over-the-Counter Bulletin Board market in the U.S.
The BCSC's executive director initially intervened by issuing a halt-trade order on June 28.
Daniel Clozza, Martin Tutschek and Grant Curtis, all of whom are residents of B.C., are named in the notice of hearing. Clozza is president, CEO, and a director of Forum National, while Tutschek is CFO and a director of the company. Curtis is a shareholder.
The notice says that BCSC staff is concerned with the unusual trading volume and price increase for shares of Forum National that took place between May and June of 2012. Staff is also concerned with apparent attempts to violate or circumvent the halt-trade order by transferring or issuing shares of Forum National.
During the relevant period, the market for Forum National shares experienced a sudden increase in trading volume and price.
The market capitalization of Forum National increased from just over USD $6 million, to over USD $120 million between May and June.
During this sudden increase, Forum National was the subject of an internet promotional campaign funded by undisclosed persons, and the company itself issued seven news releases related to the expansion of its viatical settlement business, which involves selling a terminally ill individual's life insurance policy at a discount to a third party.
BCSC staff requested that Forum National issue a clarifying news release explaining what role, if any, the company or any its management had in the promotional internet campaign.
To date, the company has declined to issue the release.
These allegations have not been proven.
The BCSC will apply to extend the temporary halt order on July 31.