Securities-law violators denied bankruptcy discharge by B.C. court

By James Langton | April 15, 2020 | Last updated on April 15, 2020
2 min read
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A judge in British Columbia has ruled that a couple who owe $19 million in penalties and disgorgement to the British Columbia Securities Commission (BCSC) can’t be discharged from bankruptcy with those sanctions still owing.

The BCSC reported that the B.C. Supreme Court denied the bid from Thalbinder Singh Poonian and Shailu Poonian. According to the court’s decision, the Poonians owe more than $25 million, including their large debt to the BCSC.

The BCSC opposed the bid along with the federal revenue ministry “because a discharge would have extinguished the financial sanctions [the Poonians] owe to the BCSC and the tax arrears, interest and penalties they owe to the Canada Revenue Agency,” the BCSC said.

The court sided with the BCSC, saying in its decision that “it would be contrary to the public interest, in my view, to grant them a suspended discharge from bankruptcy.”

One of the purposes of the BCSC’s enforcement powers is deterrence, the court noted.

“That purpose would be frustrated if a person having been ordered by the commission to make a substantial payment could declare bankruptcy and then wait a prescribed period of time and be free of the financial consequences of his or her actions,” the court said in its ruling.

Additionally, the court found that the BCSC is different from other creditors.

“The commission is not in a position to compromise payments that would ultimately be collected in the public interest and for the benefit of investors,” the court said.

The Poonians were sanctioned by the BCSC in 2015 after a hearing panel found that they manipulated the share price of a company on the TSX Venture Exchange, and then illegally obtained approximately $7 million by dumping those shares on unsuspecting buyers.

The hearing panel ordered them to pay a combined $13.5 million in penalties and $5.5 million in disgorgement. They haven’t paid any of the sanctions, the commission said.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.