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

Vandals burned a hole in the platform at the top of the Somenos Marsh Open Air Classroom early on the morning of Thursday, April 22. (Kevin Rothbauer/Citizen)
Arson closes Somenos Marsh viewing platform

Fletcher estimates the damage at more than $5,000.

Pharmacist Barbara Violo arranges empty vials of the Oxford-AstraZeneca COVID-19 vaccine that she has provided to customers at the Junction Chemist, an independent pharmacy in Toronto, Monday, April 19, 2021. Younger Canadians in several provinces are now able to get the AstraZeneca vaccine. THE CANADIAN PRESS/Nathan Denette
AstraZeneca vaccine appointments fill up fast on Vancouver Island

More pharmacies expected to be added as supply increases

A B.C. Centre for Disease Control map shows new COVID-19 cases by local health area for the week of April 11-17. (BCCDC image)
BCCDC says fresh COVID-19 cases down in most Island Health areas

Nanaimo sees its fewest new COVID-19 cases since mid January

More sleeping cabins for the homeless in the Cowichan Valley could soon be put in place if a $2.5-million grant application to the UBCM Strengthening Communities’ Services funding program is successful. (File photo)
Funding sought to expand homeless initiatives in Cowichan Valley

$2.5-million grant would see more sleeping cabins and outreach projects

The old Stanley Gordon school in Lake Cowichan. (Lexi Bainas/Gazette file)
Editorial: Old school properties represent potential for our areas

There are opportunities, often sitting right in the middle of our small communities.

Canadian Prime Minister Justin Trudeau and United States President Joe Biden smile as they say farewell following a virtual joint statement in Ottawa, Tuesday, February 23, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau pledges to cut emissions by 40% to 45% by 2030, short of U.S. goal

Trudeau announced target during a virtual climate summit convened by U.S. President Joe Biden

MLA Shirley Bond, right, answers questions during a press conference at Legislature in Victoria, B.C., on February 19, 2019. THE CANADIAN PRESS/Chad Hipolito
Former B.C. gaming minister says she wasn’t told directly about dirty cash flowing to casinos

Shirley Bond said Thursday civil forfeiture, gang violence and gambling addiction were also major concerns in 2011

RCMP Constable Etsell speaks to tourists leaving the area at a police roadblock on Westside Road south of Fintry, B.C., Thursday, July 23, 2009. THE CANADIAN PRESS/ Yvonne Berg
B.C. police say they take ‘exception’ to conducting roadblocks limiting travel

Asking the police to enforce roadblocks exposes officers to further risk and possible COVID-19 infections, says federation president Brian Sauve

As part of the province’s strategy to combat the opioid overdose crisis, take-home naloxone kits have been distributed throughout the province. (Courtesy of Gaëlle Nicolussi)
Vancouver Island could be at its worst point of overdose crises yet: medical health officer

Island Health issued overdose advisories for Victoria, various communities in the last two weeks

The conservation service confirmed they do not relocate cougars from settled areas but that euthanasia is not necessarily the fate for an animal in the Fanny Bay area. The hope is that the animal will move on to wild areas. (File photo)
Woman hopes cat-stalking Fanny Bay cougar can avoid euthanization

Conservation officers do not relocate the animals from Vancouver Island

Tofino residents expressed frustration over a recent post by Long Beach Lodge owner Tim Hackett that falsely claimed all residents have been vaccinated. (Westerly file photo)
Resort owner apologizes for suggesting Tofino is safe to travel to

Long Beach Lodge owner Tim Hackett apologizes to community and visitors

BC Hydro released a survey Thursday, April 22. It found that many British Columbians are unintentionally contributing to climate change with their yard maintenance choices. (Pixabay)
Spend a lot of time doing yard work? It might be contributing to climate change

Recent BC Hydro survey finds 60% of homeowners still use gas-powered lawnmowers and yard equipment

Journal de Montreal is seen in Montreal, on Thursday, April 22, 2021. The daily newspaper uses a file picture of Prime Minister Justin Trudeau dressed in traditional Indian clothing during his trip to India to illustrate a story on the Indian variant of the coronavirus. Paul Chiasson/The Canadian Press
Montreal newspaper blasted for front-page photo of Trudeau in India

Trudeau is wearing traditional Indian clothes and holding his hands together in prayer beside a caption that reads, ‘The Indian variant has arrived’

Police executed a search warrant at the Devils Army Clubhouse on Petersen road in Campbell River on August 10, 2017.
Murder trial: Victim left to conclude out-of-court settlement on the day he disappeared

Trial of Richard Alexander in death of John Dillon Brown continues in B.C. Supreme Court in Victoria

Most Read