VANCOUVER - Securities regulators in British Columbia have fined a Vancouver Island man $17.5 million and permanently banned him from the province's capital markets for perpetrating what it says was a fraud on hundreds of people, many of them seniors.
In announcing its decision Wednesday, the B.C. Securities Commission said a commission panel had found that David Michael Michaels, a former mutual fund salesperson, illegally and fraudulently advised 484 clients to purchase more than $65 million of exempt market securities. Such securities are sold under exemptions from prospectus requirements.
The commission, which also ordered Michaels to pay it the $5.8 million in commissions he received "as a result of his misconduct," says at least $40 million of the money his clients invested has been lost and most of most of the rest remains at risk.
"Michaels' business model was highly predatory in nature . . . he instilled trust in his clients and then betrayed that trust," the commission said.
"The majority of his victims have little or no opportunity to earn income from work or otherwise financially recover lost amounts," it added.
Besides the financial penalties, the panel also ordered that Michaels resign any position he holds as a director or officer of an issuer or registrant and, which limited exceptions, is "permanently prohibited from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant."