A Burnaby resident and longtime Vancouver stock promoter facing a B.C. Securities Commission hearing for allegations he violated a cease trade order now has much more serious legal proceedings to deal with.
Aarif Jamani now faces allegations from the U.S. Securities and Exchange Commission (SEC) he committed fraud, pocketing roughly $5 million in profits for himself and his associates, in part by purchasing and moving shares between his B.C. numbered company and an offshore shell.
In a federal district court civil notice of claim filed in the Southern District of New York on Jan. 12, Jamani is charged with securities fraud and unregistered securities trading along with alleged American accomplices Jonathan Farber and Brian Keasberry.
At the heart of the allegations is how the trio surreptitiously took de facto control of a small California-based public company called County Line Energy Inc., registered in Nevada and whose principal Canadian regulator is the B.C. Securities Commission (BCSC).
“Farber, Jamani, and Keasberry engaged in a fraudulent scheme to profit from their accumulating, manipulating, and selling County Line stock to retail investors. Defendants shared the $5 million in profits from the stock sales that resulted from their scheme,” the SEC alleges.
The complaint alleges how, starting in 2017, the trio orchestrated a "pump and dump" by first establishing “handpicked figureheads” into senior roles at County Line, a de facto penny stock shell company that traded sparsely, if at all, while presenting itself as a hydroponic manufacturer.
By the fall of 2018, “a longtime associate of Jamani’s was nominally County Line’s Chief Executive Officer and Director,” the SEC stated.
With their executive associates in place at County Line, officials allege the trio amassed millions of cheap shares and then embarked on a plan to create the false appearance of investor interest by sending out promotional material and trading shares among one another.
In one instance, in 2018, the company issued its CEO 100 million shares priced at one hundredth of a cent per share, costing the trio just $10,000.
“Jamani was selling on behalf of the Defendants through an offshore brokerage firm using a nominee account. Defendants were effectively selling to themselves,” the SEC alleges.
“Farber and Jamani acted with the intent to induce trading by others.”
The U.S. regulator says Jamani used 0985358 BC Ltd. to move shares to an offshore entity that held those shares on behalf of the trio.
The “manipulative” trading and promotions bumped the price of the stock, resulting in about $5 million in profits once the trio sold the shares via the offshore brokerage accounts to retail investors buying the stock on the over-the-counter (OTC) market — a stock quotation service that facilitates public trading of shares in public companies that are not otherwise listed on national securities exchanges (like NASDAQ or the New York Stock Exchange).
Jamani no stranger to OTC market
Jamani was subject of a Vancouver Police Department investigation in an alleged bribery scheme involving Novori Inc., a Surrey-based company that traded on the OTC market, the Vancouver Sun reported in 2008. Jamani was reported as a certified management accountant at the time, however no charges were laid against him.
The BCSC confronted Jamani’s dealings with County Line in April 2023, alleging Jamani violated a 10-year-old cease trade order against County Line’s debt securities.
“Manny John Margaretis has been the CEO of County Line since August 2019. Of the 23 debt securities issued by County Line, 17 of them, totalling US$82,100, were issued after Margaretis became CEO,” the BCSC stated in a hearing notice.
“Aarif Jamani has been the president and sole director of 0985358 BC since it was incorporated in 2013, and is now the sole director of 1207124 B.C. Ltd. The sole director of 1207124 B.C. Ltd. at the time of the transactions died in November 2022.
“Margaretis and Jamani, as directors and officers of County Line and 0985358 B.C. Ltd. respectively, authorized, permitted, or acquiesced in those companies' breaches of the order, and therefore breached the order themselves,” the BCSC added.
None of the allegations for either commission have been proven in court (SEC) or by a panel of commissioners (BCSC).
The SEC is demanding a jury trial and seeking market participation bans against Jumani, repayment orders and monetary penalties.
Jamani has not responded to the charges in court.
