The BCSC has fined a Vancouver man $125,000 and permanently banned him from securities trading after he and his company redirected an investor’s money into his own accounts.

The BCSC found that Brendan Schouw accepted $1 million from an investor, redirected some of the funds into his own account, and spent about $75,000 of it on his personal mortgage payments and a separate property management business.

The investor had been told the $1 million investment–which was also lost–was for the development of a Vancouver real estate project.

Schouw has been ordered to pay an administrative penalty of $125,000 and a disgorgement order of $74,612. Schouw and his company, Hornby Residences Ltd., are banned from trading securities or exchange contracts as well as registering, acting in a management or consultative capacity in the securities market, or engaging in investor relations activities, the BCSC said.

He has also been permanently banned from becoming a director or officer for an issuer.

The “misconduct was significant in that the investor was unsophisticated with respect to investing in large scale real estate development projects and that he was totally reliant upon Schouw,” the BCSC said.

While “the investor has lost all of the $1,000,000 that he invested with the respondents,” of that amount, “we found only $74,612 of the amount invested was lost as a result of the respondents’ fraud,” the decision said.

The BCSC adds: “What is clear is that the investor has been harmed in a manner that goes beyond the mere monetary loss of his investment. The funds that were invested came from his mother’s estate and the sale of a family home. He testified as to his feelings of guilt that arise from having lost the money obtained through his mother and invested by him.”

The CRA said in April a Vancouver real estate developer of the same name, Brendan Schouw, was sentenced in provincial court to one count of GST tax evasion and fined $300,000.

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