BCSC Fines and Bans Blogger for LifeBy Andrew Rickard | June 29 2015 10:29AM
The British Columbia Securities Commission (BCSC) has fined and permanently banned blogger Noshad Dowlati from the province’s capital markets for fraud and for trading and advising without registration.
Dowlati, who called himself "The Shadow Trader" and made specific stock recommendations on his blog and Twitter account, took $10,000 from one of his readers with the understanding that he would invest it on his behalf. Dowlati was not a licensed investment advisor.
After skimming off $1000 to pay for personal expenses (such as his Visa bill and coffee at Starbucks), Dowlati lost the remaining $9000 in penny stocks without informing the investor. Under the impression that Dowlati was making him money, the investor later gave him another $5000 which he also lost in the markets.
In separate legal proceedings against Dowlati, the investor managed to recover $950 through garnishment proceedings.
In a decision published last week, the BCSC ordered that Dowlati pay the commission the $14,050 obtained as a result of his misconduct, as well as an administrative penalty of $30,000. The regulatory panel also permanently prohibited him from becoming or acting as a director or officer of any issuer or registrant, trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.
Dowlati did not appear at the BCSC hearing, nor was he represented by counsel.