BCSC Executive Director's Bulletin: Securities regulator gives notice of a
hearing into alleged fraud

VANCOUVER, Dec. 23 /CNW/ - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that Robert Lee Flickinger II (a.k.a. Robert Reynolds) perpetrated a fraud when he sold securities in two B.C. companies to hundreds of investors.

Flickinger is a U.S. resident with a history of U.S. securities regulatory infractions who has been operating in Vancouver, B.C. since at least late 2007.

The notice says that, between February 2008 and March 2010, Flickinger sold 642 limited partnership units in Lavaca III Limited Partnership and Gulf Coast Basin Limited Partnership to 272 investors for $6.42 million.

The notice alleges that Flickinger:

• Used a false identity (Robert Reynolds), hid his regulatory history from investors, and did not disclose that he was an officer and director of Lavaca and Gulf Coast.
• Falsely stated that Lavaca and Gulf Coast were managed by people who had no involvement in either, and did not know their identities were being used.
• Created fictitious biographies for the identities he stole, in which he falsely claimed they had extensive experience and qualifications.

The notice says that Flickinger diverted at least $3.5 million of the Lavaca and Gulf Coast investment proceeds to personal or corporate accounts that he controlled.

It also says that, as Reynolds, he led employees and salespeople to believe that:

• The investment proceeds they generated were being paid to an independent company for the purpose of acquiring, and operating, oil and gas companies.
• Payments received from that company came from the oil and gas interests when the company was really returning investor funds.

These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on Jan. 27, 2011.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website, www.bcsc.bc.ca. If you have questions, contact Ken Gracey, media relations, 604-899-6577.

For further information:

Ken Gracey
604-899-6577 or
(Canada) 1-800-373-6393