Securities Trading Conviction
Coquitlam Man Sentenced After Pleading Guilty to Unregistered Securities Trading
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A Coquitlam man has pleaded guilty and been sentenced for running an unregistered investment operation that took money from investors for a failed South Vancouver real estate deal. Brent Wai Keun Chow, 46, was found guilty on two counts — unregistered trading and illegal distribution of securities — following an investigation by the BC Securities Commission (BCSC), according to Daily Herald Tribune.
Chow was fined $6,000 in connection with the offences, Financial Post reported. The charges stem from activity between October 2017 and March 2018, when Chow solicited money from two investors through a company he controlled called Owl Investment Club.
Owl Investment Club Raised Money Without a Licence
Chow was the sole director and president of Owl Investment Club, a BC-numbered company. He set it up to raise capital for real estate developments in the Lower Mainland. To legally sell investments to the public in BC, a person must be registered with the BCSC. Chow was not registered, according to Toronto Sun.
Between October 2017 and March 2018, Chow accepted money from two investors. The funds were meant for the purchase and development of a property in South Vancouver. Accepting those funds without registration broke BC securities law, The Observer reported.
A $30.5 Million Deal That Fell Apart
The South Vancouver property deal required Chow to pay a deposit in two instalments, then a final sum of $30.5 million to complete the purchase. He paid the first instalment but could not secure financing for the second, according to Shoreline Beacon.
Without the financing, the deal collapsed entirely. Investors who had put money into Owl Investment Club were left exposed. The failure of the deal triggered the BCSC investigation that ultimately led to Chow's guilty plea, Fort McMurray Today reported.
BCSC Enforcement Targets Unregistered Operators
The BCSC is BC's securities regulator. Its job is to protect investors from fraud and illegal market activity. Unregistered trading means someone is selling or managing investments without the required government licence. Illegal distribution means selling securities to the public without following proper disclosure rules, according to Montreal Gazette.
Cases like Chow's are a focus for the BCSC. Investors often lose money when they deal with unregistered operators who lack oversight. The regulator regularly publishes enforcement decisions to warn the public about such activity, The Crag and Canyon noted.
Guilty Plea Closes Case After Years of Proceedings
Chow pleaded guilty to both counts rather than going to trial. He was sentenced to a $6,000 fine. The case took several years from the time of the offences in 2017 and 2018 to reach a final resolution, according to National Post.
The BCSC's investigation and prosecution of Chow shows regulators are willing to pursue smaller operators, not just large financial firms. Anyone raising money from investors in BC must be properly registered, regardless of the size of the deal, Fort McMurray Today reported.
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