British Columbia Securities Commission

British Columbia Securities Commission

January 05, 2005 09:30 ET

British Columbia Securities Commission: Veteran Investment Adviser Permanently Banned from Securities Market



JANUARY 5, 2005 - 09:30 ET

British Columbia Securities Commission: Veteran
Investment Adviser Permanently Banned from Securities

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 5, 2005) - The British
Columbia Securities Commission permanently banned a veteran investment
adviser from the securities market after he admitted to misleading
investors, selling unsuitable investments, failing to disclose conflicts
of interest, and making unauthorized discretionary trades.

George Melvin Grafton is permanently barred from buying or selling
securities, acting as a director or officer or of any issuer, and
engaging in investor relations activities except in limited
circumstances. Grafton was the principal operator of Grafton Global
Management Ltd. (formerly Grafton Asset Management Group Ltd.). Until
1997, he had been registered under the Securities Act for over 15 years
in B.C.

In 1996 and 1997, clients of Grafton and Grafton Global invested over
$5-million into Valley Mortgage and Investment Company Ltd., money that
was lent to Kelowna area property developers.

In the settlement, Grafton admitted that in some cases he falsely told
investors that the Valley investments were a lower risk investment than
stock exchange-listed securities. In selling the Valley investments, he
also failed to disclose a conflict of interest by not telling investors
that he was behind the Valley investments. Grafton sold the illiquid and
speculative Valley investments to investors when the investments were
unsuitable for many of the clients. He also admitted that he bought
Valley investments for some clients without informing them of the
purchases until after the trades had been executed. He was not
registered to make the discretionary trades.

Grafton's permanent ban allows him to participant in the securities
market in limited circumstances, including carrying out the terms of a
confidential settlement to repay the Valley investors. The BCSC has
permanently cease-traded the securities of Grafton Global and Valley.

The B.C. Securities Commission is an independent provincial government
agency responsible for regulating trading in securities within the
province. You may view the settlement on our website by
searching for George Melvin Grafton, Grafton Global Management Ltd.,
Valley Mortgage and Investment Company Ltd., or 2005 BCSECCOM 3 & 4. If
you have questions, contact Andrew Poon, Media Relations.


Contact Information

    British Columbia Securities Commission
    Andrew Poon
    (604) 899-6880 or (B.C. & Alberta) 1-800-373-6393