Kladko <BKladko@bcsc.bc.ca>
Subject: BCSC News Release: Investors to receive reimbursement for losses
PLAIN TEXT:
https://www.bcsc.bc.ca/News/News_Releases/2019/03_Investors_to_receive_reimbursement_for_losses/
Investors to receive reimbursement for losses
Vancouver - Investors defrauded by David Michael Michaels will get some money back after the British Columbia Securiti
--->es Commission (BCSC) obtained money from the sale of Michael's Hawaiian property and a cash payment from Michaels.
The BCSC's court-appointed receiver, Grant Thornton Limited, holds about $1.1 million from Michaels to return to inves
--->tors, about 20 per cent of the net amount Michaels obtained from the fraud. These payments will not affect the BCSC's
--->ability to continue to collect against Michaels' outstanding sanctions.
Grant Thornton has sent a notice explaining the claims process to investors, most of whom are seniors living in or aro
--->und Victoria. Each investor will receive a pro-rated share of the $1.1 million (minus the fee for the receiver) based
--->on the money he or she lost.
A BCSC panel found in 2014 that Michaels committed fraud against more than 480 investors. It banned him from the secur
--->ities industry and ordered him to pay $23.3 million in fines. When Michaels did not pay his fines, the BCSC started tw
--->o lawsuits, relating to property in Hawaii and Victoria.
Michaels settled the lawsuits with the BCSC in June 2018, agreeing to hand over the Hawaii property and to pay $50,000
--->. The Hawaii property was sold in December 2018, and the money given to the receiver.
"We've been persistent in our efforts to collect from Mr. Michaels, and we're now at the stage where we can return som
--->e money to the hundreds of investors who suffered losses because of their investments through him," said Doug Muir, Di
--->rector of Enforcement for the BCSC. "To get money to people as quickly as possible, we obtained court approval for a s
--->implified claims process that should be efficient and straightforward. We urge investors to respond to the receiver's
--->notice, which is required for them to participate in the distribution."
The BCSC panel found that Michaels, a former mutual fund salesman who conducted weekly radio infomercials, illegally a
--->nd fraudulently advised clients to purchase high-risk securities that were exempt from requirements to have a prospect
--->us (a formal document that provides details of an investment). He also advised them to borrow against their homes to p
--->urchase these investments.
The panel said Michaels lied to his clients and betrayed their trust. It determined that at least $40 million of the $
--->65 million his clients invested was lost; Michaels was paid $5.8 million in fees and commissions for those activities.
---> In addition to banning him from most market activities, it ordered him to pay $5.8 million that he had been paid in f
--->ees and commissions, plus a $17.5 million administrative penalty.
Investors can find out more about the claims process by visiting https://www.grantthornton.ca/en/service/advisory/cred
--->itor-updates/#David-Michael-Michaels; additional inquiries can be sent to michaels@ca.gt.com.
About the British Columbia Securities Commission (www.bcsc.bc.ca<http://www.bcsc.bc.ca>)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating
--->capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and pr
--->omote the public interest by fostering:
* A securities market that is fair and warrants public confidence
* A dynamic and competitive securities industry that provides investment opportunities and access to capital
Media Contact:
Brian Kladko
604-899-6713
Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)
inquiries@bcsc.bc.ca<mailto:inquiries@bcsc.bc.ca>
Learn how to protect yourself and become a more informed investor at www.investright.org<http://www.investright.org/>
[cid:image001.jpg@01D4AE43.68CB1AD0]
Brian Kladko
Manager, Media Relations and Public Affairs
British Columbia Securities Commission
1200 - 701 West Georgia Street
Vancouver, BC V7Y 1L2
Tel: 604-899-6713
Mobile: 604-671-6910
www.bcsc.bc.ca<http://www.bcsc.bc.ca/>
Email: bkladko@bcsc.bc.ca<mailto:%20bkladko@bcsc.bc.ca>
Find Us on: Twitter<https://twitter.com/BCSCInvestRight> | Facebook<https://www.facebook.com/BCSCInvestRight> | YouTub
--->e<https://www.youtube.com/user/BCSCInvestRight>
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If this message is not meant for you, do not use it - please let us know, and then delete it. We try hard to keep our
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<div class="WordSection1">
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><a href="https://
--->www.bcsc.bc.ca/News/News_Releases/2019/03_Investors_to_receive_reimbursement_for_losses/">https://www.bcsc.bc.ca/News/
--->News_Releases/2019/03_Investors_to_receive_reimbursement_for_losses/</a><o:p></o:p></span></b></p>
<p class="MsoNormal" align="center" style="text-align:center"><b><span style="font-size:12.0pt;font-family:"Times
---> New Roman",serif"><o:p> </o:p></span></b></p>
<p class="MsoNormal" align="center" style="text-align:center"><b><span style="font-size:12.0pt;font-family:"Times
---> New Roman",serif">Investors to receive reimbursement for losses<br>
<br>
</span></b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Vancouver</span><
--->/b><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> - Investors defrauded by David Michae
--->l Michaels will get some money back after
the British Columbia Securities Commission (BCSC) obtained money from the sale of Michael's Hawaiian property and a c
--->ash payment from Michaels.<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">The BCSC's court-app
--->ointed receiver, Grant Thornton Limited, holds about $1.1 million from Michaels to return to investors, about 20 per c
--->ent of the net amount Michaels
obtained from the fraud. These payments will not affect the BCSC's ability to continue to collect against Michaels' o
--->utstanding sanctions.<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Grant Thornton has s
--->ent a notice explaining the claims process to investors, most of whom are seniors living in or around Victoria. Each i
--->nvestor will receive a pro-rated
share of the $1.1 million (minus the fee for the receiver) based on the money he or she lost.
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">A BCSC panel found i
--->n 2014 that Michaels committed fraud against more than 480 investors. It banned him from the securities industry and o
--->rdered him to pay $23.3 million
in fines. When Michaels did not pay his fines, the BCSC started two lawsuits, relating to property in Hawaii and Vict
--->oria.
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Michaels settled the
---> lawsuits with the BCSC in June 2018, agreeing to hand over the Hawaii property and to pay $50,000. The Hawaii propert
--->y was sold in December 2018, and
the money given to the receiver.<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">"We've been persiste
--->nt in our efforts to collect from Mr. Michaels, and we're now at the stage where we can return some money to the hundr
--->eds of investors who suffered losses
because of their investments through him," said Doug Muir, Director of Enforcement for the BCSC. "To get money to peo
--->ple as quickly as possible, we obtained court approval for a simplified claims process that should be efficient and st
--->raightforward. We urge
investors to respond to the receiver's notice, which is required for them to participate in the distribution."<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">The BCSC panel found
---> that Michaels, a former mutual fund salesman who conducted weekly radio infomercials, illegally and fraudulently advi
--->sed clients to purchase high-risk
securities that were exempt from requirements to have a prospectus (a formal document that provides details of an inv
--->estment). He also advised them to borrow against their homes to purchase these investments.
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">The panel said Micha
--->els lied to his clients and betrayed their trust. It determined that at least $40 million of the $65 million his clien
--->ts invested was lost; Michaels
was paid $5.8 million in fees and commissions for those activities. In addition to banning him from most market activ
--->ities, it ordered him to pay $5.8 million that he had been paid in fees and commissions, plus a $17.5 million administ
--->rative penalty.
<br>
<br>
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">Investors can find o
--->ut more about the claims process by visiting
<span class="MsoHyperlink"><a href="https://www.grantthornton.ca/en/service/advisory/creditor-updates/#David-Michael-M
--->ichaels">https://www.grantthornton.ca/en/service/advisory/creditor-updates/#David-Michael-Michaels</a></span>; additio
--->nal inquiries can be
sent to michaels@ca.gt.com.</span><span style="font-size:12.0pt"><o:p></o:p></span></p>
<p class="MsoNormal"><b><u><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><
--->br>
About the British Columbia Securities Commission (<span class="MsoHyperlink"><a href="http://www.bcsc.bc.ca">www.bcsc.
--->bc.ca</a></span>)
<o:p></o:p></span></u></b></p>
<p class="MsoNormal" align="right" style="text-align:right"><span lang="EN-GB" style="font-size:12.0pt;font-family:&qu
--->ot;Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif">The Bri
--->tish Columbia Securities Commission is the independent provincial government agency responsible for regulating capital
---> markets in British Columbia through
the administration of the <i>Securities Act</i>. Our mission is to protect and promote the public interest by fosteri
--->ng:<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p>&n
--->bsp;</o:p></span></p>
<p class="MsoNormal" style="margin-left:.25in;text-indent:-.25in;mso-list:l0 level1 lfo2;background:white">
<![if !supportLists]><span lang="EN" style="font-size:10.0pt;font-family:Symbol"><span style="mso-list:Ignore">·
--->;<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span lang="EN" style="font-size:12.0pt;font-family:"Times New Roman",serif">
--->A securities market that is fair and warrants public confidence
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.25in;text-indent:-.25in;mso-list:l0 level1 lfo2;background:white">
<![if !supportLists]><span lang="EN-GB" style="font-size:10.0pt;font-family:Symbol"><span style="mso-list:Ignore">&mid
--->dot;<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span lang="EN" style="font-size:12.0pt;font-family:"Times New Roman",serif">
--->A dynamic and competitive securities industry that provides investment opportunities and access to capital
</span><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p
--->>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p>&n
--->bsp;</o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif">Media C
--->ontact:<br>
Brian Kladko<br>
604-899-6713<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p>&n
--->bsp;</o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif">Public
--->inquiries:<br>
604-899-6854 or 1-800-373-6393 (toll free)<br>
<u><span style="color:blue"><a href="mailto:inquiries@bcsc.bc.ca">inquiries@bcsc.bc.ca</a></span></u><o:p></o:p></span
--->></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p>&n
--->bsp;</o:p></span></p>
<p class="MsoNormal"><span lang="EN-GB" style="font-size:12.0pt;font-family:"Times New Roman",serif">Learn h
--->ow to protect yourself and become a more informed investor at <u><span style="color:blue"><a href="http://www.inv
--->estright.org/" target="_blank" title="www.investright.org">www.investright.org</a></span></u><span style="color:blue">
---><o:p></o:p></span></span></p>
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<td width="61" valign="top" style="width:46.05pt;padding:0in 5.4pt 0in 5.4pt">
<p class="MsoNormal"><img border="0" width="46" height="66" id="Picture_x0020_1" src="cid:image001.jpg@01D4AE43.68CB1A
--->D0"><span style="color:#1F497D"><o:p></o:p></span></p>
</td>
<td width="235" valign="top" style="width:202.35pt;padding:0in 5.4pt 0in 5.4pt">
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><b><span style="font-size:8.0pt;color:#1
--->F497D">Brian Kladko<o:p></o:p></span></b></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><b><span style="font-size:8.0pt;color:#1
--->F497D">Manager, Media Relations and Public Affairs<o:p></o:p></span></b></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">British Columbia Securities Commission<o:p></o:p></span></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">1200 - 701 West Georgia Street<o:p></o:p></span></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">Vancouver, BC V7Y 1L2<o:p></o:p></span></p>
</td>
<td width="270" valign="top" style="width:3.2in;padding:0in 5.4pt 0in 5.4pt">
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">Tel: 604-899-6713<o:p></o:p></span></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">Mobile: 604-671-6910<o:p></o:p></span></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><a href="http://www.bcsc.bc.ca/"><span s
--->tyle="font-size:8.0pt;color:#1F497D">www.bcsc.bc.ca</span></a><span style="font-size:8.0pt;color:#1F497D"><o:p></o:p><
--->/span></p>
<p class="MsoNormalCxSpMiddle" style="margin-bottom:2.0pt;mso-add-space:auto"><span style="font-size:8.0pt;color:#1F49
--->7D">Email:</span><a href="mailto:%20bkladko@bcsc.bc.ca"><span style="font-size:8.0pt;color:blue"> bkladko@bcsc.bc.ca</
--->span></a><span style="font-size:8.0pt;color:#1F497D"><o:p></o:p></span></p>
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