The Alberta Securities Commission (ASC) has permanently barred Kingston, Ontario resident, Christopher Uitvlugt from participating in Alberta’s capital markets after he was convicted of fraud over $5,000 in Ontario.
Uitvlugt was sentenced to five years’ imprisonment by the Ontario Superior Court of Justice in November 2019 after he pled guilty to one count of fraud related to the Ponzi scheme he operated through his Ontario business for approximately one year. The scheme raised approximately $4.8-million from at least 874 investors, including at least 10 from Alberta.
In its decision, the ASC considers whether the investments were securities or derivatives and whether the imposition of protective orders is warranted and in the public interest.
According to the decision, Uitvlugt was the CEO of Next Level Investments, later renamed the Next Level Capital Group. The firm offered individual investors the opportunity to make a return of up to 550 per cent on a three-month term investment, a return to be generated by Uitvlugt using investors’ money to trade in the foreign exchange market.
By December 2016, Next Level had several sales representatives and administrative staff, none of whom had any financial or investment education. Uitvlugt and his sales representatives were also not registered under the Securities Act (Ontario). Uitvlugt used less than one per cent, approximately $24,000 of his investors’ deposits in foreign exchange trading. His resulting trades led to a net loss of about $5,000. Payments to investors were funded by subsequent investors.
“Uitvlugt used investor deposits to pay for unauthorized personal expenses such as his Lamborghini and Audi automobiles and for Next Level expenses,” including the purchase of real estate where the firm’s offices were located. At his sentencing, Justice Tranmer observed that Uitvlugt’s conduct “involved a high degree of planning and sophistication.”
The ASC’s panel ultimately found that the investments were securities within the meaning of the Securities Act (Alberta) and that it was in the public interest to issue orders to protect Alberta investors and capital markets. It ordered Uitvlugt to permanently cease trading in securities and derivatives. “All exemptions contained in Alberta securities laws do not apply to him,” the ASC’s decision states. He is also ordered to immediately and permanently resign all director or officer positions he holds and is permanently prohibited from engaging in investor relations activities, advising or acting in a management or consultative capacity in connection with securities markets activities in the future.
