British Columbia Securities Commission

British Columbia Securities Commission

February 28, 2005 15:11 ET

British Columbia Securities Commission: Burnaby Man Loses Court Appeal


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BRITISH COLUMBIA SECURITIES COMMISSION

FEBRUARY 28, 2005 - 15:11 ET

British Columbia Securities Commission: Burnaby Man
Loses Court Appeal

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 28, 2005) - A Burnaby
man that the British Columbia Securities Commission found used the
Internet to perpetrate "pump and dump" schemes to manipulate stock
prices has lost his court appeal contesting the penalty he received from
the commission.

In September 2002, the commission banned Jesse Hogan from the B.C.
securities markets for 10 years and ordered him to pay a $25,000
administrative penalty for market manipulation.

Hogan appealed the administrative penalty saying it was not reasonable.
He argued that the penalty was disproportionate to penalties the
commission imposed in other cases and that the penalty failed to take
adequate account of his ability to pay.

In January 2005, in a unanimous judgment, the B.C. Court of Appeal
dismissed Hogan's appeal.

The court held that "administrative penalties in each case have to be
viewed in light of the overall penalties imposed, the particular
circumstances of the conduct involved, and the commission's reasonable
perception of what is required in the public interest at the time the
penalty is imposed."

The court also held that "the administrative penalty imposed is not
analogous to a fine imposed in criminal proceedings where the failure to
pay the fine could result in default time in prison" and that it is not
necessary for the amount of the penalty to be commensurate with ability
to pay. The court said,

"...if Mr. Hogan were correct in saying that the amount of his penalty
should be commensurate with his ability to pay, then individuals such as
himself, who have no other assets and who do not make their living as
licensed players in the market, could engage in the same type of
activity as Mr. Hogan, and, because of their straightened (sic)
financial circumstances (after disgorging any profit they made), face no
real penalty. The amount of the administrative penalty in this case
recognizes the need to deter just those types of players from
manipulating the market."

Hogan manipulated shares in five junior technology firms quoted on the
National Association of Securities Dealers Over-the-Counter Bulletin
Board in the U.S. For each company, he bought shares, posted hundreds of
false messages on Internet bulletin boards, waited for the share price
to rise on the basis of this false information, and sold his shares at a
profit.

Hogan's total profit from the manipulations was $41,752 (U.S.).
Following the commission decision, Hogan consented to disgorge his
profit under a court order and agreed to take a course in business
ethics.

The B.C. Securities Commission is an independent provincial government
agency responsible for regulating trading in securities within the
province. You may view the commission's decision on our website
www.bcsc.bc.ca by typing in the search box, Jesse Hogan or 2002 BCSECCOM
811. If you have questions, contact Andrew Poon, Media Relations,
604-899-6880.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    British Columbia Securities Commission
    Andrew Poon
    Media Relations
    (604) 899-6880 or (B.C. & Alberta) 1-800-373-6393
    www.bcsc.bc.ca