A British Columbia Securities Commission (BCSC) panel has found that a B.C. resident, Larry Keith Davis, has committed fraud on an investor. Davis purported to sell the individual, who has not been named, shares in a company that he did not own and instead used the investor’s money for personal expenses.
Used Funds For Personal Expenses
In June 2011, Davis led the investor in question to believe that he owned shares in a U.S.-based company and that she could purchase the shares through him. The investor paid Davis $4,000 in exchange for 40,000 shares, which he instead deposited into his personal bank account and used on personal expenses.
In April 2012, Davis convinced the investor to make a second investment of $3,000 in cash in exchange for 30,000 shares.
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The panel found that Davis did not own any shares in the company at the time of either investment or at any subsequent time.
According to the panel, Davis “knew at the time of each investment of the prohibited act and that the prohibited act could have as a consequence caused the deprivation of the investor by putting the monies she had invested with him at risk.”
When the investor began asking for her money back in April 2013, Davis repeatedly refused her requests, claiming that her investments were in shares tied to the stock market. The investor never received any shares from Davis, but succeeded in getting the return of her funds from him in Small Claims Court.
The panel has directed the parties to make submissions on sanctions according to the schedule set out in the findings.