Securities law violators agree to ASC sanctions

Admitting to multiple legal breaches, the offenders face various punishments, including fines and market-access bans

The ASC has reached a settlement agreement with Robert Jay Major, Gary Mattison Clements, and 1429250 Alberta Ltd. (Major Investments) after they admitted to multiple breaches of Alberta securities laws.

According to an August 11 news release from the regulator, Major, Clements, and Major Investments admitted that they raised $12 million from no less than 100 Albertans who invested in securities of Discovery Bay Games, Inc. and Discovery Bay Games Alberta, Inc. from 2009 to 2011.

At the time, they were not registered with the ASC to trade, deal or advise in securities. They also did not file a prospectus, and did not have an exemption from the prospectus requirement.

The offenders also made misleading representations to investors, which included not adequately describing risks associated with investments and commissions paid.

Major, a Grande Prairie resident and a director and officer of the Discovery Bay companies, also confessed that he told an investor about the possibility of Discovery Bay going public without first getting permission from the ASC.

As part of the settlement, Major will pay the ASC a $135,000 fine. Clements, who is also a Grand Prairie resident and a director of Discovery Bay Games Alberta, will pay the ASC $30,000.

Both men also agreed to various market-access bans–lasting 15 years for Major and seven years for Clements–which include:

  • trading in or purchasing securities or derivatives (with a limited exception);  
  • relying on exemptions contained in Alberta securities laws;  
  • acting as a director or officer of any issuer that relies on exemptions or distributes securities to the public; and
  • advising in securities or derivatives.

Major Investments agreed to a 15-year cessation of trading in or purchasing any securities or derivatives.

The full settlement agreement cites several mitigating circumstances relevant to the decision, including the fact that both men had clean records and little significant experience in the capital markets prior to these breaches; Discovery Bay was a legitimate enterprise with viable products; and Clements lost a significant amount of his and his wife’s personal funds that was invested in Discovery Bay.

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