President of firm paid promoter to inflate price of shares, which he was trading for himself
The British Columbia Securities Commission (BCSC) has reached a settlement agreement with an Abbotsford man and his former B.C. company for market manipulation.
According to a BCSC press release, Robert Logan Dunn, the president and director of Mosaic Holdings Inc., admitted that in 2012 he paid a stock promoter US$72,161 to promote Forum National Investments Ltd. The promoter published materials featuring “grossly promotional” statements about Forum, a B.C. company with shares that traded on the Over-the-Counter Bulletin Board market in the U.S.
Dunn and Mosaic admitted that this promotional material resulted in, or contributed to, an artificial price in Forum's shares. At the time, Dunn was also trading Forum's shares for himself.
While Dunn and Mosaic's conduct in paying the promoter was an inadvertent and unintentional breach of the Securities Act, they admitted that they should have known it would result in or contribute to a misleading appearance of trading activity or artificial price for Forum's shares.
As part of the settlement, Dunn has agreed to pay $35,000 to the BCSC.
He is also prohibited for five years from: trading in or purchasing securities or exchange contracts (with some limited exceptions); becoming or acting as a director or officer of any reporting issuer or registrant; becoming or acting as a registrant or promoter; acting in a management or consultative capacity in connection with activities in the securities market; and engaging in investor relations activities.
Dunn was sanctioned by the United States Securities and Exchange Commission (SEC) in relation to the same set of circumstances. Dunn settled with the SEC, agreeing to a $20,000 USD disgorgement order and to a permanent ban on trading, issuing, inducing or attempting to induce the purchase or sale of any penny stocks.