OSC bans BC insurance advisor from securities business in Ontario

The Ontario Securities Commission (OSC) has followed up a decision made by the British Columbia Securities Commission (BCSC) with a “protective and preventative order” which bans registered insurance representative Paul Se Hui Oei and his firm, Canadian Manu Immigration & Financial Services Inc., from acquiring or trading in any securities or derivatives in Ontario and prevents both from acting as a director, officer, registrant or promoter in Ontario.

The BCSC found, in December 2017, that Oei and Canadian Manu perpetrated a fraud, contrary to the British Columbia Securities Act, between July 2009 and August 2013. During that time, Oei was registered by the Insurance Council of British Columbia as an insurance broker. The BCSC panel found that Oei raised funds on behalf of two companies under an investment structure where Canadian Manu acquired company securities and investors subsequently purchased those marked up shares from the firm. In total, Oei and Canadian Manu raised over $13-million, misappropriating approximately $5-million. The panel rejected submissions that Oei’s lawyer was at fault for the fraud. They also explicitly rejected submissions that suggested the fraudulent misconduct was a mistake. 

The BCSC permanently banned Oei and his firm from trading in or purchasing securities or exchange contracts, except for his own account, and banned the representative from becoming or acting as a director or officer for any issuer or registrant, from becoming or acting as a registrant or promoter, from acting in any management or consultative capacity in connection with activities in the securities market, and from engaging in any investor relations activities. The BCSC also fined Oei and his firm $3,087,977.41 each, plus administrative penalties of $.5-million and $1-million respectively.

In considering whether Oei should be banned in Ontario as well, the OSC reviewed more than 900 pages of written submissions and documentary evidence to support the assertion that Oei has no intention of working in the financial industry or moving to Ontario, that he has a history of charitable work and community involvement, that he has suffered reputational damage and financial hardship as a result of the BCSC’s proceedings and that an order from the OSC would further negatively impact his reputation in the community. The submissions also restated Oei’s position that his legal counsel was responsible for the fraudulent conduct that took place.

“The BCSC panel found that the respondents had the requisite mental intent for fraud and knowingly misappropriated over $5-million of the funds provided by investors,” say the decision’s authors. “The respondents, particularly Mr. Oei who fundamentally lacks an understanding of capital markets norms and regulation, cannot be trusted to refrain from engaging in any activities in Ontario’s capital markets.”