Victorian handed trading ban for defrauding friend

The B.C. Securities Commission has permanently banned a Victoria man from the capital markets after ruling he defrauded a friend by selling securities he never owned.

Larry Keith Davis is banned from trading in securities in B.C. and has been ordered to pay a $15,000 administrative penalty for misconduct.

The ruling was initially handed down in 2016, but Davis appealed to have his ban reconsidered. That ban has now been reinstated by the BCSC.

Davis has been ordered to cease trading in, and is permanently prohibited from, purchasing securities. He may trade or purchase securities for his own account through a registrant, if he advises the broker of the commission’s decision.

Davis is permanently prohibited from 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 activities.

In 2016, the commission found Davis committed fraud when he purported to sell an investor shares in a company that he did not own and instead used the investor’s money on personal expenses including utilities, groceries and cash withdrawals.

In two transactions — one in 2011 and another in 2012 — totalling $7,000 Davis sold securities in a Nevada company called FormCap. Davis admitted at his initial hearing he never owned shares in the company.

In its initial decision, a commission panel wrote that Davis treated the investor’s funds as his own and used them within a short time of their receipt to pay his personal expenses.

The investor pursued repayment through court proceedings, eventually obtaining repayment of her $7,000 through two payments into court in the fall of 2015.