British Columbia Securities Commission

British Columbia Securities Commission

February 28, 2012 08:30 ET

BCSC Executive Director's Bulletin: Securities Regulator Issues Notice of Hearing Alleging Market Manipulation Against Former President and CEO of B.C. Corporation

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 28, 2012) - The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that the former President and Chief Executive Officer of a B.C. corporation listed on the TSX-Venture engaged in market manipulation.

The notice alleges that Damien Edward Reynolds, a Vancouver resident, caused or contributed to an artificially low price in the shares of Coltstar Ventures Inc. Reynolds was President and CEO of Coltstar from March 22, 2010 to January 2012, prior to which time he served on the board of directors.

The notice contends that Reynolds twice used a brokerage account held in his mother's name to sell shares in the company, and in doing so created an artificially low price in Coltstar's shares.

The first sell was made on March 12, 2010. On March 17, Coltstar announced that JAT 001 Holdings Ltd. would receive 700,000 convertible debentures, each convertible into one Coltstar common share and one warrant within five years based on the March 12 closing price of $0.15. Coltstar describes JAT in its filings with the TSX-V as both an insider of the company, and a family trust controlled by Reynolds.

The second sell was made on March 19, 2010. On March 22, Coltstar held a board meeting where incentive stock options were approved for its directors, based on the March 19, 2010 closing price of $0.22. Reynolds chaired the board meeting and personally received 1,000,000 optioned shares pursuant to the stock options.

The lowest market closing prices for Coltstar shares between November 25, 2009 and November 12, 2010 were after the first and second sells.

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 March 6, 2012 at 9:00am.

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 by typing Damien Edward Reynolds or 2012 BCSECCOM 61 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).

For media enquiries, contact Richard Gilhooley, media relations, 604-899-6713. For public enquiries, call 604 899 6854 or 1 800 373 6393 (toll free).

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Contact Information

  • British Columbia Securities Commission
    Richard Gilhooley
    604-899-6713 or (Canada) 1-800-373-6393