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Regulator bans and heavily fines three individuals and a company for market manipulation

By The IJ Staff | March 13 2019 11:30AM

Photo: Freepik

A British Columbia Securities Commission (BCSC) panel has imposed penalties and market bans on three individuals and a Swiss wealth management firm for market manipulation, announced the regulator March 11.

EHT Corporate Services S.A., formerly known as EuroHelvetia TrustCo. S.A. funded part of a 2011 marketing campaign that promoted a Nevada company called Kunekt, which had announced plans to enter the smartphone business. “Newsletters claimed that Kunekt was the ‘next Apple,’ even though it had $360,000 in assets and no proprietary technology,” said the regulator in a statement. With this campaign, the company reach a market capitalization of almost $180 million.

Paid for marketing campaign

Raffi Khorchidian and Garo Aram Deyrmenjian, who were living in Vancouver at the time, have been sanctioned for permitting the transfer of hundreds of thousands of dollars they beneficially owned to pay for the marketing campaign. The BCSC panel ordered that Khorchidian disgorge $7.15 million, representing the net proceeds he received from trading in Kunekt shares in accounts owned by him, and that he pay an $850,000 administrative penalty. Similarly, the panel ordered that Deyrmenjian must disgorge $7.14 million, plus pay an administrative penalty of $700,000.

Both Deyrmenjian and Khorchidian must also resign any position they hold as a director or officer of an issuer or registrant, and are permanently prohibited from taking any such role. They also were permanently barred from trading in or purchasing securities or exchange contracts; relying on any exemptions of the Securities Act; becoming or acting as director or officer a registrant or promoter; acting in a management or consultative capacity in the securities market; or engaging in investor relations activities.

$850,000 administrative penalty

David Craven, one of EHT's managing directors, was ordered to pay an $850,000 administrative penalty, and was ordered to resign any position he holds as a director or officer of an issuer or registrant, and permanently prohibited from taking any such role. He also was permanently barred from trading in or purchasing securities or exchange contracts; relying on any exemptions of the Securities Act; becoming or acting as director or officer a registrant or promoter; acting in a management or consultative capacity in the securities market; or engaging in investor relations activities.

The panel also imposed a $700,000 administrative penalty on EHT and permanently prohibited it from trading in or purchasing securities or exchange contracts; relying on any exemptions of the Securities Act; becoming or acting as a registrant or promoter; acting in a management or consultative capacity in the securities market; or engaging in investor relations activities.

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