British Columbia Securities Commission

British Columbia Securities Commission

March 28, 2011 17:17 ET

British Columbia Securities Commission: B.C. Man Previously Convicted for Involvement in Ponzi Scheme Banned 25 Years for Running Illegal Phone Room

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 28, 2011) - In a settlement agreement with the British Columbia Securities Commission, Frederick Johnathon Nielsen (formerly known as Frederick John Gilliland) has received a 25-year market ban in B.C. for running an illegal telephone room and trading without registration.

Between late March and early May of 2009, Nielsen, 58, admitted to organizing and operating an illegal telephone room in Surrey, B.C. for the purpose of marketing and selling shares in Green Farms International, a private U.S. company. Nielsen contravened securities law by hiring, instructing and supervising four salespeople to sell the shares over the phone. Nielsen has never been registered to trade securities in B.C.

As a direct result of the calls made from the illegal telephone room, two U.S. residents invested a total of $4,500 in Green Farms. Nielsen also solicited a $10,000 investment from a U.S. resident independent of the telephone room activity.

In October of 2005, Nielsen (then known as Gilliland) was sentenced to 60 months in prison and ordered to pay over $12 million in restitution after pleading guilty in a Florida court to conspiracy to commit wire fraud and securities fraud, and conspiracy to commit money laundering. The charges related to a Ponzi scheme in which more than $20 million was solicited from over 200 international investors.

For his misconduct, Nielsen is prohibited, with limited exceptions, from trading securities for 25 years. He is also prohibited, for the same period, from acting as a director or officer of any issuer; acting as a registrant, investment fund manager, or promoter; acting as manager or consultant in connection with the securities industry; and, engaging in investor relations.

As he is unemployed with little or no net worth, and is obliged to make payments stemming from his U.S. conviction, Nielsen has no prospect of being able to pay the $50,000 fine that would otherwise have been levied against him for his misconduct.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlement agreement on our website www.bcsc.bc.ca by typing in the search box, Frederick Johnathon Nielsen or 2011 BCSECCOM 138. If you have questions, contact Richard Gilhooley, media relations, 604-899-6713.

Learn how to protect yourself and become a more informed investor at www.investright.org.

Contact Information

  • British Columbia Securities Commission
    Richard Gilhooley
    604-899-6713 or (Canada) 1-800-373-6393
    www.bcsc.bc.ca