A Richmond man who was subject to restrictions by the British Columbia Securities Commission (BCSC) has been found to have breached a ban by acting as a de factor director of an exploration company.
William Raymond Malone — who, as part of an earlier settlement with the BCSC, had to complete a course of study concerning the duties and responsibilities of directors and officers — breached an order prohibiting him from acting as a director or officer of any issuer and engaging in investor relations activities.
During the time period when the order was in effect, a BCSC panel found that Malone breached the order by acting as a de facto director and/or officer of Lion King Resources Inc., a private B.C. company that was in the business of promoting and developing an iron ore property in the Atacama region of Chile.
In its decision, the panel stated, “the evidence overwhelmingly supports the conclusion that Malone was acting as a de facto director or officer of Lion King during the relevant time.”
The panel found that Malone acted as a de facto director or officer when he organized the creation of Lion King, had signing authority over corporate bank accounts, and negotiated for and secured rights to Lion King’s Chilean property, among other things.
The panel also found that Malone breached the order by conducting investor relations activities on behalf of Lion King when he solicited a B.C. resident to purchase securities in Lion King.
The investor testified that Malone introduced him to the investment opportunity and even showed him samples of sand containing iron ore taken from the property. In July 2010, the investor purchased 33,333 shares of Lion King for $5,000.
Sanctions have not yet been made in the case. Hearings have been scheduled for later this year to determine the penalties Malone will face as a result of last week’s findings.
The BCSC is the independent provincial government agency responsible for regulating capital markets in the province, through the administration of the Securities Act.
For more information on how to protect yourself and become a more informed investor, go online to InvestRight.org.
