News & Insights

The latest developments and opinions from Taylor Veinotte Sullivan.

Acquittal for TVS Client in Market Manipulation Prosecution

Carey Veinotte and Andrew Crabtree achieve acquittal for TVS client in market manipulation prosecution by the British Columbia Securities Commission

In a Notice of Hearing issued November 25, 2015, the Executive Director of the British Columbia Securities Commission (BCSC) accused Michael Mugford, David Lim and TVS’ client, Swiss trust firm EuroHelvetia TrustCo. S.A. (EHT) of orchestrating a “pump and dump” scheme in the stock of Urban Barns Foods Inc. The BCSC accused EHT and the other Respondents of violating the Securities Act and in particular section 57(a) of the Act, “market manipulation”, or creating the false appearance of trading activity or an artificial price for the shares of Urban Barn.

TVS Partner Carey Veinotte and Andrew Crabtree, Associate Counsel, represented EHT in defence of the allegations during a Hearing before a Panel of the BCSC in November 2016.

On June 5, 2017, the Panel issued its Reasons in 56 pages. It found Respondents Lim and Mugford guilty of market manipulation contrary to section 57(a) of the Act in orchestrating a pump and dump scheme to inflate, sell and profit from the stock of Urban Barns.

The Panel ruled that EHT was purely peripheral to the Scheme; that there was no evidence to indicate it was anything other than an escrow agent taking instructions from a client; and that there was no evidence that EHT had breached the Act.

The Panel’s Decision can be found at: 2017 BCSECOMM 196.