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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Red who wrote (125111)	12/29/2003 1:06:00 PM
From: Rocket Red	Respond to of 150070

BCSC deems Hughes dangerous B.C. Securities Commission *BCSC Monday December 29 2003 News Release Mr. Andrew Poon reports B.C. SECURITIES COMMISSION: FORMER MUTUAL FUND SALESMAN DEFRAUDS KAMLOOPS SENIORS The B.C. Securities Commission called a Kamloops man "the most dangerous kind of market abuser there is" in ruling that he acted contrary to the public interest when he made misrepresentations and committed fraud in selling $1.5-million of unqualified securities to investors. For a five-year period, beginning in 1996, Steven Peter Hughes, a former registrant, sold what he called high-yield, low-risk securities to people in and around Kamloops by promising the investors -- mostly senior citizens -- a two-year return of 25 per cent. Mr. Hughes said that he was in the business of assessing, investing and managing venture capital investments on behalf of investors. BCSC staff testified that Mr. Hughes invested less than $300,000 of the investors' $1.5-million. He used most of the money to pay for his unrelated personal expenses. In selling the investments, Mr. Hughes misrepresented the risk and likelihood of a return to investors when, among other misrepresentations, he: promised the investment returns when his business had no sources of revenue other than new investors' moneys; paid interest and capital due to existing investors from new investors' funds; told investors that their money had "matured" and had been rolled over into another business when he had spent all of the money; represented to some investors that his business was financially healthy when he knew that it was insolvent; and used investors' funds to make improper payments to himself, including a settlement penalty imposed by the BCSC in 1999. Most investors lost all of the money they invested with Mr. Hughes. Almost all of Mr. Hughes's investors were seniors from the Desert Gardens Senior Center in Kamloops who had been referred to him by John Grigg. Mr. Grigg was a former alderman, licensed insurance agent, a self-professed seniors' advocate and the author of a local weekly newspaper column for seniors. In sending investors to Mr. Hughes, Mr. Grigg received a five per cent referral fee from Mr. Hughes. When Mr. Grigg was interviewed by BCSC staff in April, 2002, he was 76 and in poor health. He has since died. "There is little doubt that ordinary, decent people would feel that Hughes's conduct was clearly dishonest and unscrupulous," said the commission panel in rendering its decision. "Indeed most of the investors were ordinary, decent people who could ill afford, but bore, the brunt of Hughes's dishonest and unscrupulous conduct." In its decision, the panel noted that Hughes traded and distributed securities despite being subject to a cease-trade order issued as part of his February, 1999, settlement with the executive director. "(Hughes) deliberately breached securities legislation requirements he knew he was obliged to meet. As a previous registrant he knew about the duty to know and make suitable investments for clients and deal with them fairly. He deliberately preyed on senior citizens because he knew they were easy and trusting targets. Grigg led them to Hughes and Hughes abused them without a twinge of guilt," said the panel. "When it was clear his business was insolvent and his house of cards was falling down he did not break stride in continuing to solicit funds from vulnerable seniors with the same specious representations that he had made all along." The panel concluded, "In our view, he is the most dangerous kind of market abuser there is." The commission will hear further submissions before issuing sanctions. (c) Copyright 2003 Canjex Publishing Ltd. stockwatch.com old url (better for printing)