More than $6 million in sanctions for Ponzi fraudBy The IJ Staff | July 16 2020 03:17PM
The British Columbia Securities Commission (BCSC) announced July 16 that it has ordered two B.C. residents and two companies to pay a total of $6.3 million for committing fraud through a Ponzi scheme.
Todd Norman John Bezzasso raised approximately $5 million from 85 investors through his companies, Bezzaz Holdings Group Ltd. (Bezzaz) and Nexus Global Trading Ltd. (Nexus), says the regulator. During this time, Bezzasso engaged fellow Richmond resident Wei Kai (a.k.a. Kevin) Liao to find investors on his behalf, stated the BCSC.
A BCSC panel found that “instead of using all of investor funds as promised, Bezzasso was actually operating a Ponzi scheme. A large portion of the investors' funds was being used to pay earlier investors, meaning many people who invested later during the scheme lost some or all of their money,” says the regulator.
While the BCSC panel found that Bezzasso, Bezzaz and Nexus committed fraud against all 85 investors, the panel found that Liao committed fraud against one investor, traded in securities without being registered and acted as an adviser to investors without being registered.
Bezzasso has been ordered to pay an administrative penalty of $4.5 million, and Bezzasso, Bezzaz and Nexus are jointly ordered to pay a financial sanction of $1,619,563, which the regulator says represents the amount they obtained or avoided losing as a result of the misconduct.
For his misconduct, Liao is ordered to pay $100,000 in administrative sanctions and a financial sanction of $68,530, representing the amount he obtained or avoided losing as a result of his misconduct.
In addition, Bezzasso is permanently banned and Liao is prohibited for 15 years from: relying on any exemption under the Securities Act; being a director or officer of any issuer or registrant; being or acting as a registrant or promoter; acting in a management or consultative capacity in connection with the securities market and engaging in investor relations activities.
The BCSC adds that they are also banned for the same time periods from trading in or purchasing securities or exchange contracts, although Liao is allowed to do so for personal use through a registered dealer. Bezzaz and Nexus are permanently banned from trading in or purchasing securities or exchange contracts and engaging in investor relations activities.