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by Mike Caswell

Scottsdale Capital Advisors Corp. and its owner, John Hurry, have succeeded in having a $1.5-million fine and permanent ban overturned. (All figures are in U.S. dollars.). Scottsdale and Mr. Hurry previously received the penalties for facilitating the sale of tens of millions of unregistered shares in penny stocks while ignoring indications that insiders were behind the sales. The shares included those of a Vancouver-linked OTC Markets company, Voip Pal.com Inc.

The fines were overturned in an administrative ruling handed down by the U.S. Securities and Exchange Commission on Friday, Sept. 17. A panel of five SEC commissioners has found in favour of Mr. Hurry, who had argued that he was not a "necessary participant or substantial factor" in the transactions at issue. He did not approve or facilitate any of the share deposits at issue.

The commissioners also determined that Scottsdale could not be held liable either, although the finding is based more on technical points of law than anything else. The 2017 ruling in which Scottsdale received the fine did not properly explain the legal basis for the penalty. Moreover, the legal analysis was not correct, the commissioners have ruled. Scottsdale could not be expected to defend itself in light of a "flawed articulation" of the legal standards.

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