BCSC panel finds company director breached settlement order and failed to disclose enforcement history
Vancouver – A West Vancouver man violated a B.C. Securities Commission (BCSC) order by acting as a director of two companies and failed to disclose his enforcement history while raising money from investors, a BCSC panel has ruled.
Patrick Aaron Dunn had signed a settlement agreement with the BCSC in March 2016 for unregistered trading and illegal distribution of securities in connection with investments he raised for a seniors housing complex in Creston. The order prohibited Dunn for two years from, among other things, becoming or acting as a director or officer of any issuer or registrant unless he owned all of the shares.
Later in 2016, Dunn incorporated a company in B.C. and at times acted as a director, but he did not own all of the company’s shares. Dunn also acted as a director of another company between July 2016 and March 2017, and did not own all of the shares in that company. The BCSC panel found that Dunn breached his settlement agreement by acting as director or officer of two companies when he was prohibited from doing so.
Dunn was also the sole director and officer for another company, Viribus Structural Connectors Inc., which was incorporated in B.C. in 2017. Viribus launched two crowdfunding campaigns in 2020 that raised $17,300 from 69 investors. In its offering document, Viribus did not disclose Dunn’s enforcement history – as required by the Securities Act – when it encouraged investors to buy shares.
The BCSC panel found that Viribus violated the Act by failing to disclose Dunn’s regulatory history. It also found that Dunn violated the Act by authorizing, permitting or acquiescing in Viribus’ violation. In its decision, a BCSC panel said Dunn also knew or should have known that the offering document contained a false or misleading statement when it failed to disclose his regulatory history.
“The omissions misled investors to believe that there was no cause for concern about Dunn’s regulatory history, when the opposite was true,” the panel wrote in its decision.
The panel directed the parties to make submissions on sanctions.
About the B.C. Securities Commission (www.bcsc.bc.ca)
The B.C. Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
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