Investors recoup a bit from B.C. securities fraud

Investors who lost an estimated $33 million in connection with a real estate investment fraud are poised to recover about $2.1 million, according to the British Columbia Securities Commission (BCSC).

In 2016 a BCSC hearing panel found that sisters Siu Mui “Debbie” Wong and Siu Kon “Bonnie” Soo defrauded investors and illegally distributed securities as part of a property development scheme. The scheme included misappropriating $1.2 million of investors’ money, using the money for unapproved purposes, and acquiring land — from a company they controlled — at inflated prices and selling units to investors at the inflated valuation.

In 2017 a regulatory hearing panel ordered $22 million in sanctions against them, including $6 million in penalties against each sister and about $10 million in disgorgement against them and various companies. They were also banned from the industry.

Now, the BCSC says the court-appointed receiver in the case, MNP Ltd., has recovered about $2.1 million, primarily from the sale of properties involved in the scheme. The proceeds will be distributed to the 92 victims that submitted a claim in the case.

According to MNP’s latest report based on filings in various legal actions, collective investor losses are estimated to be about $33 million. The money collected by the receiver ($2.1 million is net of the costs of the receivership, which totalled almost $800,000) will be paid to harmed investors on a pro-rated basis. Approved claims total about $12.6 million.

“The receiver went to great lengths to gather assets for the benefit of victims of this devastating fraud,” said Doug Muir, director of enforcement with the BCSC, in a release. “This case highlights the importance of using our powers under the Securities Act to enforce our financial orders and get money back to victims of investment fraud.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.