A B.C. Securities Commission (BCSC) hearing for members of the Bridgemark Group who are accused of illegal insider trading has been postponed another year.
The hearing was scheduled to commence Nov. 1 and run until Jan. 23, 2023; however, commissioner Audrey Ho accepted an application from respondent Justin Edgar Liu to adjourn until Sept. 11, 2023, which is nearly five years from the original Nov. 26, 2018 notice of hearing.
B.C. Securities Commission executive director Peter Brady did not oppose the application nor did co-respondents Anthony Kevin Jackson, Robert John Lawrence and Cameron Robert Paddock.
A brief hearing notice from Oct. 11 sets out the new dates; however, there is no reason given as to why the adjournment was allowed and the commission refused to release the application to Glacier Media.
The respondents are members of the so-called Bridgemark Group, comprised of dozens of purported consultants and their respective companies who initially faced serious allegations of conduct contrary to the public interest.
The allegations of a widespread conspiracy of consultant cash and share swaps with at least 11 penny stock firms entailed what is understood to be one of, if not the largest hearing notices in the commission’s history.
But in April 2021 the commission dropped most of the respondents from the original notice and with no stated reasons. And while the commission claimed then that it may re-issue notices to respondents, only some companies have faced further scrutiny.
Instead, the commission amended its original notice to include only Liu, Jackson, Lawrence and Paddock and their six respective companies, who are now alleged to have performed illegal insider trading and/or conducted themselves contrary to the public interest as directors.
“Between February and August 2018, the respondents allegedly took part in a scheme involving nine issuers that raised $50.8 million through 12 private placements. The issuers kept only a small portion of those funds. They paid most of the remaining funds to consultants as prepaid consultant fees, despite the fact that little or no consulting work was done to warrant those fees.
“Some of the consultants purchased shares of the issuers through a consultant exemption, so as a result, they could sell them immediately without a hold period,” stated BCSC.
Liu, Jackson and Paddock plus Lukor, BridgeMark, Tavistock and Rockshore “bought or sold their shares with the knowledge that the issuers kept only a small portion of the funds they raised, a material fact or change that wasn’t disclosed to the public.”
By doing so, the BCSC alleges that they committed insider trading, illegally. The BCSC also alleges that Liu did not file any insider reports for buying or selling shares of two issuers.
The BCSC’s allegations have not been proven by a panel of commissioners.
A timeline of Bridgemark Group events
November 2018: BCSC executive director Peter Brady issues a notice of hearing to 11 CSE-listed companies as well as 25 individuals and their 26 associated firms — collectively dubbed by Brady as the Bridgemark Group.
February 2019: Canadian Securities Exchange to implement a four-month hold period on shares sold by companies under the consultant exemption.
April 2019: The BCSC commences proceedings to ban convicted fraudster and Bridgemark Group member Aly Babu Mawji from B.C.’s capital markets.
June 2019: Bridgemark Group company Beleave Inc. admits it “participated in conduct that is abusive to B.C.’s capital markets” in relation to the alleged scheme.
July 2019: A class-action lawsuit is launched against Bridgemark Group members.
July 2019: Multiple properties frozen by the commission amidst Bridgemark fraud investigation. Freeze orders to be challenged in B.C. Supreme Court on constitutional grounds.
September 2019: Investigation records show how a Vancouver woman seemingly went from working at McDonald’s to buying and selling at least $5.9 million worth of stock while working as a secretary for Bridgemark Financial.
May 2020: Bridgemark Group company SpeakEasy Cannabis Club Ltd. admits purported consultants were paid $1.45 million but performed no consulting work in a settlement that also conceded it participated in “conduct abusive to the capital markets.”
May 2020: Executive director Peter Brady submitted to a panel of independent commissioners (adjudicators) that Justin Liu and Anthony Jackson “are the primary architects of the cash-swap scheme and a distinct threat to our capital markets.”
January 2021: Bridgemark Group company Beleave Inc. to pay $2.4 million to class-action investors, following admission of ‘conduct abusive to B.C.’s capital markets.’
April 2019: The commission clears most of the original respondents, in a large notice of discontinuance.
July 2021: After a challenge from Jackson and Liu, the B.C. Supreme Court affirms freeze orders against properties and bank and brokerage accounts issued by the B.C. Securities Commission against public market participants are constitutional.
February 2022: Bridgemark Group companies Affinor Growers Inc. and Preveceutical Medical Inc. issued hearing notices for B.C. Securities Act violations.
June 2022: Norman George Wilfred Wareham, a director and CFO of New Point Exploration Corp., a Bridgemark Group company, admits to misrepresentations and is fined.
August 2022: A commission panel significantly lowers freeze orders of Bridgemark Group respondents by not factoring in lucrative consulting contracts.
September 2022: Tiffany Sweeney of Research Capital Corporation (formerly known as Mackie Research Capital Corporation) reached a settlement with the Investment Industry Regulatory Organization of Canada, admitting she “failed to fulfil her gatekeeper responsibilities” in share transactions related to Bridgemark Group companies.
November 2022: Insider trading hearings are delayed to September 2023.