British Columbia Securities Commission

British Columbia Securities Commission

February 07, 2011 09:00 ET

BCSC Panel Fines Fraudster $6 Million and Issues Lifetime Bans

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 7, 2011) - A British Columbia Securities Commission panel has fined a B.C. man $6 million and permanently banned him from the province's capital markets, after finding that he perpetrated a $1.3 million fraud on six investors.

The panel also found that Luc Castiglioni, a B.C. resident, gave false and misleading information to the commission, and that he falsely represented a company's registration status under B.C. securities laws.

Castiglioni raised a total $8.2 million from more than 60 investors using two companies, CPLC Limited Partnership and CPLC Management Group Ltd. The panel made findings based on $1.3 million commission staff traced during the investigation, and found that Castiglioni used this money to enrich himself and his family members, and for other purposes.

Castiglioni alone controlled the flow of funds through the two companies. He prepared false account statements for investors, and misrepresented the structure and operation of the companies to them. He also forged bank statements in order to frustrate commission staff's attempt to discover the truth.

Furthermore, Castiglioni prepared, or caused to be prepared, documents for investors that said CPLC Management Group was a registered portfolio manager and that he was a registered adviser.

"This was a lie, and a serious one," the panel said. "Registration is one of the key investor protection mechanisms in the Act, and a representation of registration leads investors to a degree of trust and reliance they otherwise would not have."

The panel also found that CPLC Management Group made untrue representations about its registration status, and that CPLC Limited Partnership engaged in conduct contrary to the public interest by distributing securities that were integral to the fraud.

Due to the aggravating factors of his misconduct, the panel fined Castiglioni $6 million – three times the amount he defrauded investors, plus an additional $2 million. It also ordered disgorgement of nearly $1.3 million.

In addition to the administrative penalty, the panel ordered Castiglioni permanently banned from trading securities or exchange contracts and from being a manager or consultant in connection to the securities market. Castiglioni is also prohibited from being a director or officer of any issuer, registrant or investment fund manager, being a registrant, investment fund manager or promoter, and from engaging in investor relations activities.

The panel permanently cease traded the securities of CPLC Limited Partnership and CPLC Management Group. Both companies are also permanently banned from purchasing securities or exchange contracts, from acting as a registrant, investment fund manager or promoter, and from engaging in investor relations activities.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province.

You may view the decision on our website by typing in the search box, Luc Castiglioni, CPLC Limited Partnership, CPLC Management Group Ltd. or 2011 BCSECCOM 62. If you have questions, contact Ken Gracey, media relations, 604-899-6577.

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Contact Information

  • British Columbia Securities Commission
    Ken Gracey
    604-899-6577 or (Canada) 1-800-373-6393