The exemption looked airtight. The investor behind it didn't qualify.
A lawsuit over a $1.75 million investment, dormant for years, is heading to trial after a British Columbia judge refused to dismiss it.
The Supreme Court of British Columbia ruled on May 27, 2026 in McKay v Sidhu, 2026 BCSC 958 that Lisa McKay's claim against Geoffrey Rajay Sidhu, his late father Abtar Shar Sidhu, and Bracetek Industries Group Ltd. can proceed, despite a defense bid to throw it out for sitting idle.
McKay filed her notice of civil claim on December 11, 2017. She alleges she was induced to invest in Bracetek by the negligence, negligent misrepresentation, and breach of fiduciary duty of Geoffrey Sidhu, and that Abtar Sidhu and the company knowingly assisted him or acted jointly to deceive her. She put $1.75 million into Bracetek in December 2015, then paid a further $52,500 the following month to become a "value added reseller" of its products.
For advisors and compliance officers, the most instructive piece is how the money was raised. McKay bought her securities on the basis that she was an "accredited investor" - the exemption that lets issuers skip a prospectus. She did not actually qualify. The BC Securities Commission later found that Bracetek had distributed $1.75 million in securities in violation of the Securities Act because no prospectus was filed and no exemption was available. It is a clean illustration of what happens when the exemption is claimed but the investor behind it does not meet the test.
The regulatory file ran deep. In a 2021 notice of hearing, the Commission alleged the respondents "defrauded a BC investor," and that Bracetek's true condition was never disclosed - less than $100 in the bank, no revenue, unpaid licensing fees, and more than $300,000 in additional expenses. Geoffrey Sidhu settled in 2022, agreeing to pay $900,000 in disgorgement and a $50,000 fine. The Commission later paid that $900,000, plus interest, to McKay, and routed another $178,749.82 recovered from a third party to her as well.
That regulatory recovery sat at the center of the dismissal fight. Sidhu argued the civil action should be tossed for want of prosecution, pointing to more than seven years of near-silence after the claim was filed. Chief Justice Skolrood agreed the delay was inordinate. But he found it excusable, because McKay had paused the civil case while the Commission process ran its course - a process triggered by her own complaint and built on the same facts. He also noted Sidhu had known since 2018 that she intended to wait, and took no steps to push the matter forward.
The result: the application was dismissed, and the parties were ordered to schedule a case planning conference within 30 days to set a timetable for the remaining pre-trial steps. The plaintiff has filed a notice of trial setting the matter for 15 days beginning July 12, 2027, though it was unclear at the hearing whether Sidhu had agreed to that date.
None of the fraud allegations have been tested at trial. Geoffrey Sidhu's settlement with the regulator admitted only a breach of the prospectus rules, not fraud. For the industry, the takeaway is narrower and more durable than any single verdict: an exemption is only as good as the investor it rests on, and a regulator's findings can keep a stalled civil claim alive years later.
