The Alberta Securities Commission (ASC) announced on Nov. 14 it has sanctioned Brian Arthur Kitts and Vesta Capcorp Inc. for perpetrating a fraud on investors.
The ASC panel ordered Kitts and Vesta to pay an administrative penalty of $600,000, a disgorgement order of $1,960,457 and $150,000 in costs. The panel also ordered permanent market access bans against both Kitts and Vesta.
The respondents who obtained approximately $4.3 million and US$850,000 from 38 investors engaged in fraudulent misconduct by misrepresenting the use made of the invested funds to investors, an ASC panel previously found.
Misappropriated funds for personal use
The respondents diverted funds to unidentified businesses not within the reasonable expectation of the investors, misappropriated funds to Kitt’s personal use, and used investors’ capital to repay principal and pay fake profits to investors, said the regulator.
The ASC panel said the respondents' misconduct was "egregious" and that Kitts "planned to defraud innocent investors from the outset." The panel also said that Kitts had "continued his fraudulent capital-market activity in Alberta in the face of regulatory sanction and criminal proceedings elsewhere" and was "seemingly an unrepentant recidivist."
Finally, the panel stated that "the Respondents pose a pronounced risk to the public and are deserving of significant sanctions that will prevent them from future participation in the capital market."
