Michael Lathigee and Earle Pasquill were accused of fraudulently raising $21.7 million from 698 investors between Feb. 1 and Nov. 15, 2008, in a scheme involving a group of companies they controlled called the Freedom Investment Club.
The FIC Group included FIC Real Estate Projects Ltd., FIC Foreclosure Fund Ltd., and WBIC Canada Ltd.
A British Columbia Securities Commission panel said in a statement Friday that the two men raised the money without telling investors important facts.
It alleged Lathigee and Pasquill both knew when they were distributing the securities that FIC Group had severe cash flow problems, including an unfunded $8-million cost overrun on the company's biggest project.
The panel also found Lathigee and Pasquill used most of the $9.9 million raised from 331 investors in FIC Foreclosure to make loans to related companies instead of investing the money in foreclosures of residential properties in the United States, the purpose for which they were raised.
"The magnitude of the fraud perpetrated in this case is among the largest in British Columbia history," the panel said.
Lathigee and Pasquill were each ordered to pay a $15-million administrative penalty and to disgorge the money obtained as a result of their misconduct.
That included $9.8 million relating to FIC Projects, $9.9 million relating to FIC Foreclosure and $2 million relating to WBIC.
They were also ordered to resign any positions they hold as an officer or a director of an issuer or registrant and were permanently banned from trading in securities, purchasing securities or exchange contracts and from becoming or acting as a director or officer of any issuer or registrant.