VANCOUVER, Aug. 9, 2012 /CNW/ - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a B.C. timeshare company and its directors distributed securities illegally with the assistance of another B.C. company that primarily sells life insurance products.
The notice alleges that from December 2006 to June 2011, Aviawest Resorts Inc. distributed securities to 214 investors without having filed a prospectus, raising approximately $12.7 million. In doing so, the company and its directors, Rob DiCastri, Andrew Pearson, James Pearson, Lawrence Pearson, and Susan Pearson contravened securities laws. Aviawest has an office in Nanaimo, B.C., and all Aviawest directors are B.C. residents.
The company claimed that 173 of the investors (collectively representing about $9.2 million) purchased the securities under the "Family, Friends and Business Associates" exemption, but the exemption was not applicable. For 18 investors who collectively invested $1.2 million, Aviawest did not claim exemptions from securities laws.
The notice also alleges that between February 2010 and April 2011, Zulak Financial Group Ltd, a B.C. company with an office in Nanaimo, and company directors Karla Ann Davis and Melvin Zulak, marketed Aviawest securities to 21 of their life insurance clients who invested approximately $1.8 million. Both Davis and Zulak are B.C. residents.BCSC staff maintain that the directors of Aviawest and Zulak Financial authorized, permitted, or acquiesced in Aviawest's and Zulak Financial's contraventions of securities laws. These allegations have not been proven. Counsel for the executive director will apply for final orders against the parties The first hearing into the allegations before a panel of commissioners is set for Tuesday, September 18, 2012 at 9:00am. The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Rob DiCastri, Andrew Pearson, James Pearson, Lawrence Pearson, Susan Pearson, Aviawest Resorts Inc, Karla Ann Davis, Melvin Zulak, Zulak Financial Group Ltd. or 2012 BCSECCOM 316 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website. Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA). Learn how to protect yourself and become a more informed investor at www.investright.org SOURCE British Columbia Securities Commission