An Alberta Securities Commission panel has sanctioned Wayne Loderick Bennett for breaching Alberta securities laws in connection with the distribution of securities of Environmental Sentry Services Inc. (ESSI).
The ASC says that Bennett was the president and sole director of ESSI since its incorporation until early 2016. Bennett directly and indirectly raised approximately $3.8 million for ESSI, between 2010 and 2016, by distributing ESSI shares and debentures to at least 100 investors in Alberta and Ontario, the commission says.
The ASC panel found, consistent with a statement of admissions, that Bennett:
- illegally distributed ESSI securities without a prospectus or any apparent attempt to ensure that prospectus exemptions were available for such transactions; and
- made misleading or untrue statements in relation to ESSI’s intellectual property and made prohibited representations to investors.
As such, the ASC panel ordered that Bennett:
- must pay an administrative penalty of $50,000, and $30,000 of the costs of the investigation and hearing;
- must resign all positions, and is permanently prohibited from becoming a director or officer (or both) of any issuer, registrant, investment fund manager, recognized exchange, recognized self-regulatory organization, recognized clearing agency, recognized trade repository or recognized quotation and trade reporting system;
- must permanently cease trading in or purchasing securities or derivatives, and all exemptions contained in Alberta securities laws do not apply to him; and
- be subject to a number of permanent market-access bans, including a prohibition from engaging in investor relations activities, from advising in securities or derivatives, and from acting in a management or consultative capacity in connection with activities in the securities market.
The ASC panel decided the imposition of permanent market-access bans was required, given “the seriousness of Bennett’s misconduct and the harm done to investors, along with the apparent ease with which he was able to raise capital while having little or no regard for Alberta securities laws.”
Bennett had not previously been sanctioned by the ASC, and he wasn’t registered in any capacity with the ASC during the relevant time, the sanction decision says. While these facts could have moderated “the need for specific deterrence,” says ASC, “we consider the making of misrepresentations and prohibited representations while soliciting investments to be self-evidently wrong. Accordingly, we do not consider Bennett’s lack of registration or the absence of previous sanctions to be mitigating in the circumstances.”