B.C.’s financial market regulator has permanently banned West Vancouver businessman Frederick Sharp from the province’s investment markets following a U.S. court judgment against him in a $1-billion stock fraud.
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While Sharp has not faced charges for his activities here, a B.C. Securities Commission panel said it imposed the permanent ban this week against Sharp under its authority to reciprocate orders by other securities regulators, self-regulatory organizations, exchanges and courts, in Canada and abroad.
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A U.S. federal court issued a default judgment against Sharp last year for fraud and market manipulation after he did not defend himself against allegations he masterminded a long-running “complex” scheme to facilitate penny stock fraud in hundreds of companies with gross sales of more than $1 billion US.
In penny stock frauds, the price of low-value stocks are artificially inflated by owners, who hide their identities, and then sold for a profit at the expense of buyers.
The U.S. district court for Massachusetts issued penalties against Sharp and an order to pay back illicit profits, with interest, totalling $53 million US.
“This conduct significantly harmed unsuspecting investors,” B.C. Securities Commission panel members Gordon Johnson and Jason Milne wrote in a Feb. 13 decision. “Sharp’s misconduct was extremely egregious, and we find there to be no mitigating factors.”
The securities commission said it provided Sharp the opportunity to be heard, but he did not provide any evidence or submissions.
The permanent ban includes barring Sharp from trading any securities, or becoming a director or officer of a company that issues shares or a promoter.
Sharp and others were charged with violating anti-fraud, registration and reporting provisions of the U.S. Securities Act. Sharp also faces criminal charges in the U.S. related to the alleged scheme.
While Sharp, 70, did not defend himself in the U.S., he is fighting efforts by the U.S. Securities and Exchange Commission to enforce in Canada the illicit profit component of his U.S. penalty, about $37 million in Canadian currency.
Sharp filed a response last fall to the SEC’s legal enforcement effort in B.C. in which he denies all of the SEC’s claims. Sharp argues he was denied “procedural fairness,” not properly served notice of the U.S. court proceedings, and that the U.S. court action has no jurisdiction over him.
Source: https://vancouversun.com/business/west-vancouver-businessman-frederick-sharp-permanently-banned-from-b-c-s-investment-markets
