signs-direction-stop-compliance

The British Columbia Securities Commission (BCSC) has permanently banned two people for fraud and breaches of cease trade and temporary orders: Richard Lian (also known as Richard Terry Ruuska) and Enna M. Keller.

In the same decision, the panel also ordered permanent bans against EagleMark Ventures and Falcon Holdings for breaching the same cease trade and temporary orders. Lian was the managing member of both EagleMark and Falcon, and had sole signing authority over their respective bank accounts.

The panel also found that Keller engaged in unregistered trading without an exemption.

In August 2016, Lian and Keller raised approximately US$3.2 million from roughly 315 investors by offering securities relating to Lexicon Building Systems, a manufacturing company that has been the subject of a cease trade order (CTO) by BCSC staff since October 2009.

Lian and Keller told investors that the money raised would be used to fund various operating costs, debts and liabilities of Lexicon, while Lian worked to remove the company from bankruptcy and get the CTO revoked. Lexicon didn’t authorize Lian and Keller’s activities.

Lian spent about US$600,000 of the US$3.2 million raised on Lexicon’s debts, expenses and other liabilities, and repaid approximately US$180,000 to investors who demanded return of their funds. The balance of approximately US$2.4 million was almost entirely spent by Lian on matters unrelated to Lexicon.

In its decision, the panel stated that “several investor witnesses testified to their sense of dismay and betrayal and the impact of their losses on them and their family and friends who also suffered losses.”

Lian and Keller have been permanently banned from trading in or purchasing any securities or exchange contracts, becoming or acting as directors or officers of any issuer or registrant, becoming or acting as registrants or promoters, acting in a management or consultative capacity in connection with activities in the securities market and engaging in investor relations activities.

Lian and Keller have each been ordered to pay administrative penalties of $2.42 million. Lian has also been ordered to pay a disgorgement order of US$2.4 million. Lian, EagleMark and Falcon are jointly and severally liable for this disgorgement amount.

The panel also ordered that securities of EagleMark and Falcon be permanently cease-traded. Both companies are permanently banned from purchasing securities or exchange contracts; being a registrant, investment manager or promoter; and engaging in investor relations.

Originally published on Advisor.ca
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