Canaccord faces 3rd $300,000 Pryde rig suitby Brent Mudry
Howe Street brokerage Canaccord Capital and former broker John Pryde, who allegedly caused heavy client losses through the manipulation of five stocks listed on the former Canadian Venture Exchange, face a third client suit, for $300,000, pushing the total lawsuit tally to the $2.1-million mark. In a statement of claim filed Monday in the Supreme Court of British Columbia, Vancouver dentist Dr. Richard Tsow claims he suffered significant losses, believed to be in the $300,000 range, during Mr. Pryde's tenure at Canaccord.
The allegations in the suit, filed by Vancouver lawyer Malcolm Maclean of Davis & Co., have not yet been proven in court and no statements of defence have yet been filed.
The Tsow action parallels a $1.05-million suit launched by former client Barbara Schmidt July 11 and a $750,000 suit launched July 25 by former clients Dale Johannesen and his wife Heather Marie Johannesen, both filed by Vancouver securities lawyer Rod Anderson of Anderson & Galati. All three suits claim Mr. Pryde rigged five stocks: Coldswitch Technologies, Dexton Technologies, Illusion Systems, VoxCom and Polymer Solutions.
In the latest suit, Dr. Tsow claims he was a long-time client of Mr. Pryde from 1984 to January, 2002. (After a brief stint at Pemberton Securities, Mr. Pryde joined BZW Canada in 1988, Brink Hudson Lefever in 1995, and then Canaccord in November, 1998, when it took over some of Brink's assets and its clients.)
Similar to the two earlier suits, Dr. Tsow claims Mr. Pryde did unauthorized numerous discretionary trades in his accounts between January, 2000, and August, 2001, and manipulated the five stocks between July, 2000, and April, 2001, through high-closing, cross trades between clients, upticks and debit kiting, until he could no longer support the promotions.
Dr. Tsow also claims he was also lured into buying shares of Illusion in a $2.1-million private placement of 4.8 million special warrants at 44 cents in February, 2000, handled by Canaccord. The dentist invested a total of $110,000 for 250,000 special warrants. After Mr. Pryde's Pryde Capital, the biggest buyers were Ms. Schmidt and Jordan Development, a real estate developer she heads, with 608,000 units for $267,000.
The suit claims broker Mr. Pryde told Dr. Tsow that there was a very high degree of probability that Illusion would become very successful, and he called the stock a very low-risk investment. "Pryde continued to represent to the plaintiffs that Illusion was a very sound investment until the day he left the employment of Canaccord," states the suit. The stock subsequently collapsed and now trades at three cents. |
