Vancouver company fined $900,000 for illegally selling shares to ‘vulnerable’ investor
A Vancouver company has been ordered to pay $900,000 for illegally selling shares to an “extremely vulnerable” investor whose money was used to pay off the company’s debts and enrich its director and family members.
The eight-year saga — which includes an ongoing civil suit in B.C. Supreme Court — started when Lisa McKay, a divorced mother of two, met Geoffrey Rajay Sidhu on an alternative-lifestyle networking website in November 2015, according to court documents and findings by the B.C. Securities Commission.
While getting to know each other, McKay told Sidhu she lived in a $3.1-million mortgage-free home in Vancouver’s Kerrisdale neighbourhood that she obtained through a divorce settlement, but was struggling financially, with $316,000 in debt and minimal employment income from a fledging tutoring business.
Sidhu advised her on ways to improve her financial situation. In December 2015, McKay took out a one-year mortgage of $2.07 million against her home, and invested most of it in Bracetek, a company owned by Sidhu’s father, Abtar Shah Sidhu, that made braces used in residential and commercial construction. Sidhu said his father planned to take the company public within a year, and that McKay would triple her investment.
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