Mr. Doug Muir reports

BCSC SECURES ORDER FOR SALE OF HAWAIIAN PROPERTY OWNED BY DAVID MICHAEL MICHAELS

The British Columbia Securities Commission (BCSC) has obtained a court order from the Third Circuit Court of the State of Hawaii for the sale of property belonging to David Michaels. The BCSC will receive the proceeds of the sale, which it can then return to the victims of Mr. Michaels's fraud.

In August, 2014, a BCSC panel found that Mr. Michaels committed fraud against 484 investors, many of them seniors. In October, 2014, the panel imposed sanctions against Mr. Michaels totalling $23.3-million.

In 2015, as part of its efforts to collect against Mr. Michaels, the BCSC launched a lawsuit against property in Hawaii and a separate lawsuit in British Columbia in relation to a property located in Mill Bay. Mr. Michaels is a co-owner of the Hawaiian property, but does not own the Mill Bay property.

On June 12, 2018, the BCSC entered into an agreement with Mr. Michaels, which will result in the BCSC recovering funds for the benefit of investors. Under the agreement, the Hawaiian property will be sold and the BCSC will receive the proceeds. The BCSC will also receive a cash payment of $50,000 from Mr. Michaels. The BCSC will then distribute both amounts to investors.

The agreement does not affect the BCSC's ability to continue to collect against Mr. Michaels's outstanding sanctions.

"This is a great outcome for victims of Mr. Michaels's misconduct," says Doug Muir, director of enforcement at the BCSC. "It avoids the further delay and uncertainty of lawsuits, which means we will have money to return to victims sooner. The BCSC will continue our efforts to collect our sanctions against Mr. Michaels and this agreement is a good step as part of that process."

The BCSC will post a notice on its website when the money has been received, along with instructions on how investors can make claims.

About the B.C. Securities Commission

The BCSC is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act.