British Columbia Securities Commission

British Columbia Securities Commission

August 30, 2007 08:30 ET

BCSC Executive Director's Bulletin: Securities Regulator Issues Notice of Hearing to Extend Temporary Order Against Offshore Bank

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 30, 2007) - The Executive Director of the British Columbia Securities Commission has issued a notice of hearing to extend a temporary order issued against a European-based bank that holds an account at a B.C. investment dealer where suspicious trading activity took place during a spam campaign.

The notice of hearing states that Liechtenstein-based Hypo Alpe-Adria Bank AG trades through accounts at various investment dealers in B.C.

Amongst other things, the notice alleges, Hypo Bank traded a large volume of shares of an Over-the-Counter Bulletin Board issuer through an account during a period when the issuer's stock was part of a promotional e-mail (spam) campaign that commission staff was tracking.

The notice also alleges that between April 18 and May 31 of this year, 86 per cent of the same account's total market transactions of spammed securities were sales. The notice states this activity is a potential indicator of selling into a market manipulation.

Hypo Bank claims Liechtenstein banking laws do not allow it to provide the names of the beneficial owners of securities traded through any of its B.C. accounts to any party, and commission staff have been unable to identify the beneficial owners.

Without knowing who the beneficial owners are commission staff cannot effectively investigate whether they have engaged in illegal activity. In addition, the B.C. investment dealers holding these accounts are unable to fulfill their know your client obligations under the Securities Rules. Due to these circumstances, the Executive Director has temporarily ordered that Hypo Bank cease trading in and be prohibited from purchasing any securities or exchange contracts in B.C.

These allegations have not been proven. A hearing will be held on the 12th Floor Hearing Room, 701 West Georgia Street, Vancouver, B.C., on September 11, 2007 at 2:00 p.m. At the hearing, counsel representing the Executive Director will ask the Commission to extend the temporary order.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view notices of hearings on our website www.bcsc.bc.ca. If you have questions, contact Ken Gracey, Media Relations, 604-899-6577.

Learn how to avoid investment fraud at the BCSC's investor education website: www.investright.org.

Contact Information

  • British Columbia Securities Commission
    Ken Gracey
    Media Relations
    (604) 899-6577 or (B.C. & Alberta) 1-800-373-6393
    Website: www.bcsc.bc.ca