Oct. 28, 2008
SAINT JOHN (CNB) - Two securities companies were ordered in September by a New Brunswick Securities Commission (NBSC) panel to cease trading in all securities after a New Brunswick resident filed a complaint against Global Energy Group Ltd. (Global) and New Gold Ltd. Partnerships (New Gold). The panel issued its reasons for decision on Oct. 20, following a similar order issued by the Ontario Securities Commission (OSC).
The NBSC investigation began after the New Brunswick resident had been solicited by telephone to purchase securities promoted by Global. The complainant attended an information session for the business community, given by NBSC Executive Director Rick Hancox, in Carleton County. Given what he learned during the presentation, he informed the NBSC that he felt he was being solicited by a suspicious company.
"Reporting suspicious behaviour is so important because it enables us to take action," Hancox said. "This gentleman filed a complaint and may have saved himself and others from losing hard-earned money. The awareness generated in Carleton County is valuable because it resonates the truth of the old saying: if it sounds too good to be true, it probably is."
The NBSC contacted the OSC, which is involved in an ongoing investigation of Global and New Gold. The OSC alleged that Global and New Gold solicited individuals by telephone to invest in Kentucky oil-well-drilling partnerships. It appeared that sales calls were being made from boiler-room operations in Ontario. The OSC further alleged that Global and New Gold distributed securities without complying with securities regulations, and may have provided investors with false or misleading information. Filed affidavits claim that the majority of investor funds have been used for purposes other than as described in investment literature provided to investors.
The OSC issued a temporary cease trade order, which the NBSC reciprocated. The NBSC order states that Global and New Gold shall cease trading in all securities, and that they may not use any exemption under New Brunswick securities law. The NBSC order remains in effect for as long as the OSC order is in effect.
In two unrelated matters, reciprocal cease trade orders were also issued against: Malsbury Investment Corp. (MIC) and Shayne Lorne Malsbury, based on a decision by the Alberta Securities Commission (ASC); and against Global Petroleum Strategies, LLC; Petroleum Unlimited, LLC; Aurora Escrow Services, LLC; and Roger A. Kimmel Jr., (Global Petroleum respondents) following orders by the ASC and the Saskatchewan Financial Services Commission (SFSC).
MIC and Malsbury allegedly solicited investments for land development in the Fort McMurray area. The NBSC became aware that there were several New Brunswick investors, which prompted the commission to act. Neither MIC nor Malsbury has ever registered in New Brunswick to trade in securities, nor have they ever filed or sought to file a prospectus. The NBSC order against MIC and Malsbury remains in effect for as long as the ASC's order is in effect.
The Global Petroleum respondents allegedly solicited investors by fax throughout Canada. In their investigation, ASC staff was told that there were New Brunswick investors, prompting the NBSC's action. The order against the Global Petroleum respondents remains in effect for as long as the ASC order or SFSC order is in effect.
Recent changes to the Securities Act in New Brunswick allow the NBSC to issue reciprocal orders that are based on orders issued in other jurisdictions. This helps improve efficiency and co-operation on enforcement issues among securities regulators across Canada.
MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045, or e-mail: Michelle.Robichaud@nbsc-cvmnb.ca.