British Columbia Securities Commission

British Columbia Securities Commission

March 10, 2005 12:50 ET

British Columbia Securities Commission: Kamloops Man Gets Lifetime Market Ban for Defrauding Investors


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BRITISH COLUMBIA SECURITIES COMMISSION

MARCH 10, 2005 - 12:50 ET

British Columbia Securities Commission: Kamloops Man
Gets Lifetime Market Ban for Defrauding Investors

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 10, 2005) - The
British Columbia Securities Commission has found that a Kamloops man
violated securities laws when he committed fraud and lied to investors
in raising more than $2.3-million from individuals in the Kamloops area.

Ronald Stephen Barker has been permanently banned from trading
securities, from being a director or officer of any issuer, and from
engaging in investor relations activities. He must also pay an
administrative penalty of $250,000. The commission has permanently
cease-traded the securities of Double Eagle Investments Inc., the
company that Barker used in raising money from investors. The commission
has also ordered Barker and Double Eagle to pay more than $58,000 in
costs related to the hearing.

The commission found that Barker violated securities laws when he traded
and distributed securities without registration or a prospectus, or
exemption from those requirements. He also acted as an investment
adviser without being registered to do so.

Barker advised clients that an investment in Double Eagle was safe and
suitable when he knew that this was not true. In some instances, he
misled investors into believing that their money would be invested in a
company that was in the business of corporate leases and financing, such
as leasing equipment to dental offices. Instead, the majority of the
funds were used for other purposes, including: unsecured business and
personal loans, venture capital and stock market investments, and
advances to himself and his companies, including a retail golf business
that he owned and nightclub business in which he held a one-third
interest.

In soliciting investments in Double Eagle, Barker promised that it was a
"very safe investment" and "as safe as money in the bank," even when he
knew that Double Eagle had numerous non-performing loans and was in
financial difficulty. In one case, he admitted that he advised an
investor in her late sixties to invest $80,000 into the company when he
knew Double Eagle was "going down the toilet."

"The facts are that Barker knew that Double Eagle was not generating its
target returns," said the panel. "He knew he was relying on new
shareholders to pay out existing shareholders. He knew that many of
Double Eagle's loans and leases were in default. He knew that most of
Double Eagle's business activities were inconsistent with how he was
describing Double Eagle's business to investors. He simply must have
known that he was making misrepresentations."

The panel also found that Barker acted fraudulently because he raised
money from investors when he knew that it would be impossible for Double
Eagle to generate returns for its shareholders' investments and that
their capital was at risk.

The panel found that Barker enriched himself at the expense of investors
by causing Double Eagle to advance $824,000 to himself and his
companies. Barker failed to document loans and keep proper business
records. He also failed to keep separate Double Eagle's assets from his
own and treated Double Eagle's funds and other assets as if they were
his own.

Between November 1996 and August 2002, Barker and Double Eagle raised
over $2.3-million from 58 investors, with 57 of whom were B.C. residents
mainly from the Kamloops area. Close to 75 per cent of that money - over
$1.7-million - has been lost.

"Through their serious misconduct, Barker and Double Eagle significantly
harmed investors and damaged the integrity of British Columbia's capital
markets," said the panel. "Their conduct shows they are not fit to
participate in our capital markets. We must also make orders that will
demonstrate the consequences of the conduct they exhibited, and that
will have an appropriate deterrent effect."

The B.C. Securities Commission is an independent provincial government
agency responsible for regulating trading in securities within the
province. You may view the decision on our website www.bcsc.bc.ca by
typing in the search box, Ronald Stephen Barker or 2005 BCSECCOM 146. 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