Surrey man banned for bogus gold scheme

Securities commission also issues cease- trade order against Bahamian firm

The B. C. Securities Commission has permanently banned a Surrey man from the B. C. securities market after he defrauded German and Swiss investors of $ 1.5 million in a bogus gold futures and foreign- exchange trading scheme.

And in a separate action, the commission issued a ceasetrade order against a Bahamian brokerage firm after it traded securities for B. C. residents without being registered in this province.

In the first action, a BCSC hearing panel found that Michael Robert Shantz, who is in his late 20s, set up a dummy office in downtown Vancouver and persuaded 11 European investors to invest $ 1.53 million with his company, Canada Pacific Consulting Inc., ostensibly for trading gold futures and foreign exchange currency.

However, instead of investing the money as promised, he wired $ 1.2 million to bank accounts in Spain and used another $ 210,000 for personal purposes. Only $ 18,000 was remitted to investors.

“There is no evidence that Canada Pacific was engaged in any legitimate business,” the panel stated.

“Canada Pacific lied to investors, stole their money and took elaborate steps to make the whole scam appear legitimate.”

The hearing panel found Shantz had engaged in an illegal distribution of securities and committed fraud. In addition to his market ban, he was ordered to pay to the commission the $ 1.53 million he obtained as a result of his illegal activity, as well as an administrative penalty of $ 630,000.

In the second action, a BCSC hearing panel issued a ceasetrade order against Gibraltar Global Securities Inc., which is registered as a securities dealer in the Bahamas, for trading and advising in securities in B. C. without being registered here, and for refusing to provide BCSC staff with information relating to B. C. residents who have held accounts with the company.

The panel said BCSC enforcement staff provided evidence that more than two dozen B. C. residents were trading securities through accounts at Gibraltar, and several of those clients have been the subjects of past and ongoing investigations by the BCSC.

The panel also said Gibraltar had opened accounts with Global Securities Corp., a Vancouverbased brokerage firm. Gibraltar had maintained that trading in those accounts was “proprietary and not for the benefit of its clients,” but the panel said BCSC staff provided multiple examples where Gibraltar was taking instructions from clients for trading in those accounts, which consisted mainly of shares of TSX Venture Exchange companies.

( The commission earlier issued a freeze order against Gibraltar’s accounts at Global, freezing about $ 2.2 million in cash and securities. That order remains in effect.)

The panel also noted that BCSC staff had asked Gibraltar to provide full details of its B. C. clients and their trading, but the firm had refused. The panel said this refusal rendered Gibraltar “unsuitable to engage in securities related activities in, or connected with, British Columbia.”