ASC sanctions five for securities violations

An Alberta Securities Commission (ASC) panel has sanctioned five respondents:

• Ferlyn Robert John Chmelyk,
• Blackbridge Financial Inc.,
• 1735560 Alberta Ltd. (560),
• 1735563 Alberta Ltd. (563) and
• 1751886 Alberta Ltd. (886).

As outlined in the merits decision from February 2017:

• Chmelyk and Blackbridge Financial illegally traded and distributed securities and made materially untrue statements to investors;
• Chmelyk, 560, 563 and 886 illegally distributed securities;
• 563 failed to file exempt-distribution reports; and
• Chmelyk authorized, permitted or acquiesced in the corporate respondents’ contraventions of Alberta securities laws.

Investors lost all their capital, and one investor incurred $25,000 to $30,000 in legal fees seeking to recover his funds.

In rendering its sanction decision, the ASC panel ordered that:

• Chmelyk must pay an administrative penalty of $75,000, and $90,000 of the costs of the investigation and hearing;
• Chmelyk must resign all positions he holds as a director or officer (or both), and is prohibited from becoming a director or officer (or both) of any issuer, registrant or investment fund manager; and
• Chmelyk, BFI, 560, 563 and 886 be subject to a number of market access bans, including engaging in investor relations activities, advising in securities or derivatives, and acting in a management or consultative capacity in connection with activities in the securities market.

Chmelyk’s sanctions are in effect until the later of 10 years and the date on which the administrative penalty ordered has been paid in full to the ASC. The sanctions against companies 560, 563 and 886 are in effect for 10 years, and the sanctions against Blackbridge Financial are permanent.

The ASC panel stated, “We consider [the misconduct of Blackbridge Financial and Chmelyk] to be very serious. It caused [investors] to make important investment decisions based on materially false information.”

Read the full decision.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.