BCSC bans, fines two for market manipulation

A British Columbia Securities Commission (BCSC) panel has fined and permanently banned David Tuan Seng Lim and Michael Mugford from B.C.’s capital markets for market manipulation.

Lim, a Vancouver resident, was an investment advisor who was registered under the Securities Act during the relevant period. Mugford was a Lions Bay, B.C. resident who was a client and business associate of Lim.

The panel found that Lim and Mugford engaged in a market manipulation by creating an artificial share price for a company called Urban Barns from November 2009 to February 2010.

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The panel found that the respondents paid or assisted in paying a third party to run a tout sheet publishing campaign to promote the company’s shares, which resulted in the artificial price. In its findings decision, the panel described the tout sheets as “grossly promotional” and “designed to trick the reader into believing that the Urban Barns shares were worth far more than they really were.”

For Lim’s and Mugford’s misconduct, the panel ordered that they both resign any position they hold as a director or officer of any issuer or registrant. They are both permanently banned from trading in or purchasing securities (with limited exceptions), becoming or acting as a director or officer of any issuer or registrant (with limited exceptions for Lim only), becoming or acting as a registrant or promoter, acting in a management or consultative capacity in connection with activities in the securities market, and engaging in investor relations.

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In its sanctions decision, the panel noted that “Lim played a far more significant role than Mugford in carrying out the ‘pump and dump’ manipulation of the Urban Barns shares” and that “sanctions must reflect the differing contributions.”

Lim has been ordered to pay the commission an administrative penalty of $800,000; Mugford has been ordered to pay $375,000.

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Staff

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