BCSC panel permanently bans B.C. man for attempted fraud

VANCOUVER, Oct. 17, 2012 /CNW/ - A British Columbia Securities Commission panel has permanently banned a B.C. man from the province's capital markets for knowingly making false statements during an attempted fraud.

The panel found that Samuel Richard Allaby knowingly made false statements while promoting Gaia Equity Investments, a purported company claiming to guarantee B.C. investors a risk-free monthly rate of return of up to 9.83% through investments in renewable energy projects in developing countries. In its decision, the panel stated that Gaia is effectively a division of Midas Group Holdings Ltd, a company incorporated by Allaby and for which he is the sole director.

In March 2011, Commission staff discovered an advertisement in the Financial Services section of Vancouver's "Craigslist" website that promoted the Gaia investment. Gaia was contacted through its website by a BCSC investigator posing as a potential investor. Gaia responded by emailing the investigator a Gaia investment agreement form containing numerous false statements and instructions for depositing money in a bank account controlled by Allaby.

Among the numerous false statements made by Allaby, Gaia and Midas were claims that investors have committed over $4.2 billion to Gaia and enjoyed returns averaging 257% per annum since 2008; that Gaia maintained direct involvement and partial oversight in the green energy projects it invested in; and that the risk-free monthly returns were guaranteed by the World Bank and the International Monetary Fund.

In describing the actions of Allaby and Gaia, the panel stated that "blatant and serious misrepresentations" were made, and the respondents' conduct was found to be "an attempted fraud".

For their misconduct, Allaby, Midas and Gaia are permanently banned from trading in securities, purchasing securities or exchange contracts, and from engaging in investor relations activities. Allaby is also permanently prohibited from becoming or acting as a director or officer of any issuer or registrant, becoming or acting as a registrant, investment fund manager or promoter, and from acting in a management or consultative capacity in connection with the securities market.

Additionally, the panel ordered Allaby to pay an administrative penalty of $50,000. Midas and Gaia are jointly and severally liable for the administrative penalty.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website, www.bcsc.bc.ca, by typing Allaby, Midas Group Holdings Ltd, Gaia Equity Investments or 2012 BCSECCOM 399 in the search box.  Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.

Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).

Learn how to protect yourself and become a more informed investor at www.investright.org

SOURCE: British Columbia Securities Commission

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