BCSC Calls Blogger to AccountBy Andrew Rickard | July 24 2014 02:17PM
The British Columbia Securities Commission (BCSC) claims that a blogger offered illegal securities advice and committed fraud.
Noshad Dowlati, who called himself as "The Shadow Trader" and made specific stock recommendations on his blog and Twitter account, is facing a hearing before the BCSC next month.
In a notice published on July 21, the BCSC says that in 2011 one of Dowlati's readers gave him $10,000, agreeing to pay him a 7% commission on any trading profits with the understanding that he would stop trading should the investment fall below $8,000.
The regulators say that after taking $1000 to pay his personal expenses (such as his Visa bill and shopping at Starbucks), Dowlati lost the remaining $9000 in penny stocks without informing the investor. The investor gave Dowlati another $5000 in 2012, which he also lost in the markets.
BCSC staff allege that Dowlati perpetrated a fraud on the investor and also say he has never been licensed provide investment advice. By engaging in the business of trading and advising, the BCSC maintains that Dowlati breached securities laws regarding registration.
The allegations have not been proven. The hearing date is set for August 19.