Liht Cannabis Corp’s independent director Richard Huhn and chief operating officer Linda Sampson speak to the crowd gathered during a public information session at the Cedar Heights Community Association in Sorrento, Nov. 17, one of two public meetings held. (Jodi Brak/Salmon Arm Observer)

Liht Cannabis Corp’s independent director Richard Huhn and chief operating officer Linda Sampson speak to the crowd gathered during a public information session at the Cedar Heights Community Association in Sorrento, Nov. 17, one of two public meetings held. (Jodi Brak/Salmon Arm Observer)

B.C. securities regulator probes ‘most expansive’ alleged trading scheme in its history

Liht Cannabis Corp states it’s doing internal investigation, welcomes BC Securities Commission probe

A company with a Shuswap connection is named in an ongoing investigation by the B.C. Securities Commission.

The BCSC is currently investigating what it calls one of the most expansive alleged trading schemes in the organization’s history, involving 11 separate companies and a large group of people and firms identified as consultants.

One of the 11 companies is Liht Cannabis Corp., which is constructing a cannabis growing facility in Celista.

Black Press Media contacted BCSC media relations manager Brian Kladko on Dec. 7 and was told that executive director Peter Brady says this investigation involves a relatively large number of players compared to past cases and is the first time a Canadian securities regulator has investigated the type of transactions involved.

Liht, meanwhile, stated in a Nov. 28 news release it is carrying out its own internal investigation and welcomes the BCSC’s examination.

Twenty-five consultants and their affiliated 26 firms named have been temporarily banned from buying or selling the securities and shares of the 11 companies named by the BCSC, alleging they took part in a scheme that was abusive to the marketplace.

Most of these consultants are in B.C.’s Lower Mainland, but a few group members have addresses in the Cayman Islands, Marshall Islands, Australia, Hong Kong, the Czech Republic and Switzerland.

The ban order arises from an ongoing BCSC investigation into transactions between the purported consultants – which Brady refers to as “the BridgeMark Group” – and B.C. companies operating in the cannabis, cryptocurrency, mining and alternative energy sectors.

Related: Medical cannabis operation in the Shuswap may face regulatory hurdles

Brady alleges that four companies, after selling a total of $17.9 million worth of shares to members of the BridgeMark Group earlier this year, returned $15.3 million to members of the group. The BridgeMark Group then sold those securities in the market, often at prices far below what its members had paid, netting about $6.2 million. The four companies at the centre of the investigation include Green 2 Blue Energy Corp., Cryptobloc Technologies Corp., BLOK Technologies Inc. and New Point Exploration Corp.

According to a Nov. 26 news release from the BCSC, “the four companies subsequently issued news releases saying they had raised a certain amount of money by selling their shares, even though they had paid most of the purchase amount back to BridgeMark.”

This allegedly could make it appear as though the companies had received significant investments or interest in their projects, when the money was simply changing hands between the companies and the BridgeMark Group.

None of these allegations have been proven in court.

The BCSC is concerned that the BridgeMark Group engaged in similar transactions with seven other companies, which include Liht Cannabis Corp., the company behind the large medical cannabis operation in Celista. Liht is not one of the four primary companies being investigated in the case, but is named as a respondent along with six other companies.

Black Press contacted Liht’s chief operating officer Linda Sampson on Dec. 7 for comment regarding the case. She said the company is unable to speak to media as the matter is still under investigation by the BCSC.

However, in a news release regarding the investigation, Liht states: “The Company had engaged consulting services which were to be provided by certain members of “The BridgeMark Group” listed in the BCSC news release. Prior to the announcement, the Company had undertaken its own internal investigation and fact-finding, to reconcile the contracts and services rendered to the Company. The Company’s internal investigation has not yet been completed. The Company welcomes the BCSC’s examination of these matters, we will attend the hearing on December 7th, 2018 and cooperate with their investigation.”

Related: Column: Cannabis – from underground to mainstream

Altogether, the BridgeMark Group purchased a total of more than 252 million securities from the 11 companies between February and August, paying $50.9 million, states the BCSC news release. The temporary ban order prohibits all of the 11 Canadian Stock Exchange-listed companies from using what’s called “the consultant exemption” to sell their shares.

The BCSC alleges that the securities sales to BridgeMark were illegal because they improperly used the consultant exemption to avoid filing a prospectus, a formal document that provides details of an investment. Brady is concerned that the BridgeMark Group’s members are not consultants, that they provided little or no consulting services to the issuing companies, and engaged in the scheme for their own profit – conduct that Brady describes as “abusive to the capital markets.”

A hearing was held in Vancouver on Friday, Dec. 7 to determine the next steps in the case, and whether the temporary ban order would be extended or escalated. Due to the large scale of the case, on Dec. 7 the BCSC panel did not make a decision but “extended the temporary orders until it renders its decision on the application.”

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province.


 

@Jodi_Brak117
jodi.brak@saobserver.net

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

An investigation is underway after a man was shot and killed by Tofino RCMP in Opitsaht. (Black Press Media file photo)
Man shot and killed by Tofino RCMP in Opitsaht

Investigation underway by Independent Investigations Office of British Columbia.

Visitors relax at the natural hot springs located within Maquinna Marine Provincial Park. (tofinohiking.com photo)
Maquinna Marine Provincial Park boardwalk project on track

“The walk down the two-kilometre boardwalk to the springs itself is by far one of the most incredible experiences.”

WILDLIFE TREE: Tofino Poet Laureate Christine Lowther stands next to a giant cedar tree on District Lot 114, the site of Tofino’s controversial affordable housing project. The tree was pinned with an official Ministry of Forests yellow wildlife tree sign to educate fallers that the tree needs to be left standing for food, shelter and nesting. (Nora O’Malley photo)
Tofino author Christine Lowther calling for poetry about trees

“I’m thrilled to be of service to trees through poetry.”

Tofino will elect a new mayor and two new councillors on March 6. (Westerly file photo)
Tofino’s mayoralty candidates lay out key differences

Tofino will elect a new mayor and two new councillors on March 6.

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

A health worker holds a vial of AstraZeneca vaccine to be administered to members of the police at a COVID-19 vaccination center in Mainz, Germany, Thursday, Feb. 25, 2021. The federal state of Rhineland-Palatinate, start with the vaccination of police officers in internal police vaccination centers. (Andreas Arnold/dpa via AP)
B.C. officials to unveil new details of COVID vaccination plan Monday

Seniors and health-care workers who haven’t gotten their shot are next on the list

B.C. Supreme Court in Vancouver on Tuesday December 11, 2018. THE CANADIAN PRESS/Darryl Dyck
B.C.’s compromise on in-person worship at three churches called ‘absolutely unacceptable’

Would allow outdoor services of 25 or less by Langley, Abbotsford and Chilliwack churches

Baldy Mountain Resort was shut down on Saturday after a fatal workplace accident. (Baldy Mountain picture)
Jasmine and Gwen Donaldson are part of the CAT team working to reduce stigma for marginalized groups in Campbell River. Photo by Marc Kitteringham, Campbell River Mirror
Jasmine’s story: Stigma can be the hardest hurdle for those overcoming addiction

Recovering B.C. addict says welcome, connection and community key for rebuilding after drug habit

A Vancouver restaurant owner was found guilty of violating B.C.’s Human Rights Code by discriminating against customers on the basis of their race. (Pixabay)
Vancouver restaurant owner ordered to pay $4,000 to customers after racist remark

Referring to patrons as ‘you Arabs’ constitutes discrimination under B.C.’s Human Rights Code, ruling deems

Dasher is back home with mom Christine Girvin thanks to some help from BC Ferries staff. Photo supplied
The cat came back, with help from BC Ferries staff

After Dasher made a dash, staff in Comox found her and got her home safe

BC Ferries experienced heavy traffic on Feb. 27 following cancellations the day before due to strong winds and adverse weather. (Black Press Media file photo)
BC Ferries sailings fill up quickly after Friday cancellations due to high winds

Waits expected on Swartz Bay-Tsawwassen route, Horseshoe Bay-Departure Bay route

1957 photo shows Six Mile House-sponsored #4 1932 Ford stock car with Frank Morris (from left), Ted Mackenzie, Bill Sim and driver Gerry Sylvester. (Bud Glover/Victoria Auto Racing Hall of Fame)
Memories race as Western Speedway approaches its finish line

‘It was life to us:’ Vancouver Island racers, crew will never forget what the track gave them

Nanaimo children’s author and illustrator Lindsay Ford’s latest book is ‘Science Girl.’ (Photo courtesy Lindsay Ford)
B.C. children’s writer encourages girls to pursue the sciences in new book

Lindsay Ford is holding a virtual launch for latest book, ‘Science Girl’

Most Read