ASC issues lifetime ban in Shire case
The “guiding mind” behind four real estate investment entities the alberta securities commission says bilked victims of millions of dollars faces among the top 10 fines ever handed down by the regulator, together with her companies.
Jeanette Cleone Couch and the firms under her control are permanently barred from trading in Alberta, the commission said Wednesday.
Couch, Shire international Real estate investment sltd. and Shire asset management Ltd. must pay an administrative penalty of $750,000 and costs of $120,000. The penalty is tied for the eighth largest in ASC history. Two other funds under Couch’s control, Hawaii Fund and Bearspawat144th Avenue ltd., must pay$10,000 each.
A panel of the regulator ruled in December that Couch and her investment entities breached securities laws between 2007 and 2009 in what amounted to fraud, through activities tied to fundraising for two property development son the Hawaiian island of Maui and one outside Calgary, deals that ultimately failed.
Couch and the companies pose a permanent danger to investors, the panel said in its decision this week, characterizing the nature of misconduct as “at root, simple deceit” and noting that Couch remains “impenitent” about taking actions and authorizing fraudulent activities against investors.
Through its investigation, the regulator found that Couch, Shire International Real Estate Investments and Bearspaw at 144th Avenue had made numerous misrepresentations.
About $20.9 million deposited in the Bearspaw bank account came from investors and $7.6 million that was improperly transferred to a Shire account is “unaccounted for,” the regulator has said, its lawyer Tom McCartney last summer arguing in a hearing that the missing money — “Shire’s slush fund” — was used by Couch and her daughter for other real estate deals.
The investment companies and Couch, who has maintained her innocence, are also the subject of a $75-million class action lawsuit launched in 2009 on behalf of as many as 3,000 investors seeking to recover money they sank into real estate development deals which were allegedly promoted by Couch in Alberta, British Columbia, Ontario and Hawaii and failed.
Lawyer John Blair of Borden, Ladner and Gervais LLP who represents investors behind the suit, said in an email that he’s been awaiting the sanctions decision and evidence generated through the regulator’s process to see how those might impact “the lawsuit and the likelihood of collection.”
The regulator’s decision this week referred to a submission by Couch, in which she emphatically denied charges of fraud and said she made the best “sound business decisions” at the time, considering the world economic collapse, the class action suit and the regulator’s cease trade order.
Couch said she never sought to deceive anyone, “and I certainly never had any personal gain from any project.
“In fact I lost more money than any investor,” she wrote.
“I have no monies,” her submission asserted.