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by Mike Caswell
The U.S. Securities and Exchange Commission has won $32.3-million in civil sanctions against a pair of offshore brokerages that were part of a scheme to sell millions of improperly issued shares. (All figures are in U.S. dollars.) The SEC said that the two firms, Clear Water Securities Inc. and Legacy Global Markets SA, unloaded the shares during "aggressive and extensive" promotional campaigns of four Canadian-linked companies. The two firms did not contest the penalties.
The sanctions come as part of a case in which the SEC cited a group of offshore brokerages, including Vancouver-linked Verdmont Capital SA, for their roles in four questionable promotions from 2013. The SEC said that the brokerages sold $75-million worth of shares while campaigns were under way to tout the stocks as active oil and gas or mining issuers. Of the companies, three had links to Surrey, B.C., and the other had a Montreal man as its president.
The penalties for Clear Water and Legacy are contained in a judgment entered on July 31, 2017, in New York. Clear Water must disgorge $11.44-million in gains, plus interest, and pay a $5.08-million fine. Legacy Global must disgorge $11.75-million, plus interest, and pay a $2.29-million fine. Neither firm opposed the penalties (or otherwise appeared in the case).
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