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BCSC Fines and Bans Blogger for Life

By 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.

photo_web_877Dowlati, 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.

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