A former mutual fund rep, along with two other men and a pair of mortgage investment companies (MICs), defrauded investors by misrepresenting how their funds would be used, a regulatory hearing panel has concluded.
A hearing panel of the British Columbia Securities Commission (BCSC) ruled that former fund rep and insurance broker Donald Bruce Edward Wilson, along with David Scott Wright and Patrick Prinster, and two companies, DominionGrand II Mortgage Investment Corp. and DominionGrand Investment Fund Inc., defrauded about 40 investors of more than $1.1 million.
The panel found that the marketing materials the three men and the companies produced led investors to believe that their money would be invested in mortgages secured by real estate, but that the funds were instead used to finance the start-up costs of other companies.
“We find that the use of investor funds by MIC II and MIC III was not the use represented to investors. This conduct clearly constituted a deceitful act,” the panel said in its ruling.
“We also find that the dishonesty caused deprivation to the investors,” the panel noted. “That funds were diverted from investing in mortgages secured by real estate and actually paid to related companies and other persons on an unsecured basis, caused both the risk of loss and actual loss to investors.”
Sanctions will be handed down after the panel considers submissions from the regulator and the respondents in the case later this year.