Mr. Richard Gilhooley reports

BCSC PANEL FINDS THAT TECH COMPANY AND TWO VANCOUVER MEN ILLEGALLY DISTRIBUTED SECURITIES

A British Columbia Securities Commission (BCSC) panel has found that HRG Healthcare Resource Group Inc., Alexander Downie and Daniel G. Mohan illegally distributed securities. Mr. Downie was a director and founder of HRG, and Mr. Mohan was a director and chief executive officer of HRG. Neither has ever been registered to sell securities in British Columbia.

HRG was in the business of developing and commercializing a web-based bedside medical records and entertainment system for patients in hospitals. The panel found that the company breached securities laws concerning prospectus requirements when it distributed approximately $4-million in securities to 109 investors. Mr. Downie and Mr. Mohan were also found to have breached securities laws concerning prospectus requirements, Mr. Downie with respect to distributions to 22 investors for a total of $693,500 and Mr. Mohan with respect to distributions to 34 investors for a total of $1,709,850.

The panel also found that Mr. Downie and Mr. Mohan are liable for all of HRG's illegal distributions. Mr. Downie is liable for the full $4-million raised while Mr. Mohan is liable for $3.48-million raised (Mr. Mohan's liability was limited to the distributions that took place during the time he was a director and senior officer of the company). HRG was also found liable for 10 exempt distribution reports (EDRs) filed with the BCSC that were proven to have contained false information.

Discussing the need to hold both Mr. Downie and Mr. Mohan liable for HRG's contraventions, the panel wrote: "[Mr.] Downie was the founder of HRG. [Mr.] Mohan was the chief executive officer of HRG. Both were directors of the company. Both were actively involved in the capital-raising activities of the corporation, including soliciting potential investors, meeting with potential investors, executing subscription agreements, and driving the commercial activities which created the need for capital raising and the manner in which invested funds were spent."

The panel directed the parties to make submissions on sanctions according to the schedule set out in the findings.

You may view the findings decision on the BCSC website by typing HRG Healthcare Resource Group Inc., Alexander Downie, Daniel G. Mohan or 2015 BCSECCOM 326 in the search box. Information regarding disciplinary proceedings can be found in the enforcement section of the BCSC website.

Please visit the Canadian securities administrators' disciplined persons list for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).