The BC Securities Commission (BCSC) has frozen the properties of a group of purported consultants who are respondents in a significant and ongoing securities fraud investigation.
However, the consultants – members of what is known as the Bridgemark Group – are now seeking to strike down, revoke or vary the freeze orders, and this will require a constitutional opinion from the BC Supreme Court.
The Bridgemark Group includes 26 individuals and their respective financial services companies. The group, and 11 junior companies trading on the Canadian Securities Exchange, are subjects of the provincial regulator’s investigation into alleged phoney consulting contracts and illegal share distributions dating back to January 2018.
They are also respondents to a BCSC notice of hearing, issued last November. Many live in multimillion-dollar homes in West Vancouver.
This spring, 33 of the respondents challenged the freeze orders, deeming section 151 of the Securities Act to be an unjustifiable infringement of section 8 of the Canadian Charter of Rights and Freedoms, which guarantees everyone the right to be secure against unreasonable search and seizure.
Freeze orders under the Securities Act are not made public, according to a commission spokesperson, however their existence in this case was revealed in a BCSC judicial panel decision published on July 16.
While the decision related to a procedural matter, the panel noted that the court is to determine the constitutionality of the freeze orders, which were made under section 151.
B.C. Attorney General David Eby delivered a notice to the commission on May 8 requesting the commission refer the consultants’ applications to the court to determine if section 151 is consistent with the Charter and, if not, whether section 151 constitutes a reasonable and demonstrably justified limit under section 1 of the Charter.
Glacier Media is aware of at least one property related to the Bridgemark Group that has been listed for sale during the investigation.
Realtor Wilson Su had listed the residence of Aly Babu Mawji and his spouse Denise Trainor on 3rd Street in West Vancouver last February.
Mawji, 40, was convicted in a German court on October 12, 2012, for a multimillion-dollar pump-and-dump scam with B.C. connections. The commission is now seeking to ban Mawji from all business related to securities for those infractions.
Mawji is labelled a central figure of the investigation in a class action lawsuit launched against Bridgemark Group members, their companies and others tied to them. Trainor is also a BCSC hearing respondent and subject to the investigation. And Su, of Oakwyn Realty Downtown Ltd., is listed as a subject of the investigation as well, however details as to why are not disclosed. Trading records show Su invested in several companies run by Anthony Jackson, who is also a central figure of the Bridgemark Group. Jackson runs BridgeMark Financial Corp., and Jackson and Company Chartered Accountants. He is a prolific penny-stock promoter who has business connections to several respondents, including Mawji.
Jackson’s wife, MacDonald Realty realtor Lisa Jackson, sold Mawji’s residence – assessed at $2.8 million – last year in a cash transaction to a numbered company. Mawji’s Facebook friend Michael Ivison, a Coquitlam resident who lists employment at a Port of Vancouver grain terminal, is the company’s sole director.
Lisa Jackson is subject to an Alberta Securities Commission investigation into Prize Mining Corp. in relation to similar alleged trading violations of the Bridgemark Group.
Anthony Jackson’s sister Tara Haddad, also an accountant and BCSC respondent, once worked at Jackson’s accounting firm. In January 2018, she sought redevelopment of her heritage home at Erwin Drive, which she purchased for $9.2 million on January 8, 2016. Haddad also owns two properties in Whistler. Lisa Jackson and her father, Ken Tollstam – also an accountant and BCSC respondent – paid $15.88 million last November for a West Vancouver waterfront property, where the Jacksons live.
The entire family is challenging the freeze orders.
Jackson’s family members and business associates were involved with one company that has already admitted to the commission it “participated in conduct that is abusive to B.C.’s capital markets.”
Marijuana company Beleave Inc. issued $10 million worth of securities last April and June to purported consultants belonging to the Bridgemark Group, and was then able to issue a news release about interest in the company – a significant signal to future investors.
But the company immediately returned $7.5 million through pre-paid fees to the purported consultants, even though they did not provide any services, noted a BCSC statement. The consultants then sold their shares, profiting in the end.
The 5.4 million shares (valued at $10 million) were sold to: Haddad’s company Saiya Capital Corp. ($345,000), Cam Paddock Enterprises ($3 million), Tollstam ($655,000), BridgeMark Financial Corp. ($2 million), Detona Capital Corp. ($1.5 million), Keir MacPherson ($500,000), Mawji’s employer Northwest Marketing and Management Inc. ($500,000) and Sway Capital Corp. ($1.5 million). (Detona’s principal is Danilen Villaneuva, who is Jackson’s secretary at BridgeMark, while Sway Capital is solely directed by Von Rowell Torres, BridgeMark’s corporate secretary).
If the court upholds the right of the commission to freeze property under the Securities Act, the respondents are still challenging the orders on grounds BCSC executive director Peter Brady has not established sufficient evidence against them in order to justify the freezes. Or, failing that, the consultants also challenge that the commission has insufficient guidelines to make freeze orders under section 151.
Brady had applied to have questions surrounding evidence and guidelines sent to the court for an opinion, however the panel declined his request.
“In so doing, the legislative intent is clear – that the tribunal of the Commission, with its presumed expertise in the subject matter, is best placed to consider all questions of law and assessments of the public interest that arise from the interpretation of the Act and acts taken by the Commission in furtherance thereof,” noted the panel.
The full decision can be read here.