British Columbia Securities Commission

British Columbia Securities Commission

September 24, 2014 14:00 ET

British Columbia Securities Commission: Swiss Bank Agrees to Pay $850,000 for Unregistered Trading in B.C.

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 24, 2014) - In a settlement agreement with the British Columbia Securities Commission, Bank Gutenberg AG, Gutenberg Management AG, and Gutenberg Group AG have admitted they traded securities on behalf of British Columbia residents, contrary to the legal requirement to be registered.

The agreement states that from at least January 2010, Bank Gutenberg promoted itself through its website and by visits by bank employees to Vancouver as providing offshore securities brokerage services. The website disclaimer identified no specific restrictions on dealing with residents of British Columbia.

In spite of steps by the respondents to comply with the registration requirement, BCSC staff identified at least two B.C. residents that had accounts with Bank Gutenberg in the names of offshore corporations they controlled. These individuals provided instructions to Gutenberg Management employees, directly from B.C., to trade in B.C. reporting issuers listed on the TSX Venture Exchange (TSX-V) through their Bank Gutenberg accounts.

Over the relevant period, the total volume of transactions (including sales and purchases) in the sixteen Bank Gutenberg accounts in B.C. was approximately $327.8 million. BCSC staff identified two BC clients and suspect there may be more, however cannot confirm this because they cannot obtain access to Bank Gutenberg's records. Some, but not all, of the B.C.-based trading was for clients based in B.C, beyond the two BC clients identified by BCSC staff.

The agreement states that the respondents had additional B.C. connections, including Bank Gutenberg employing two former B.C. registrants with regulatory histories.

As part of the settlement agreement, the respondents have agreed that they breached securities laws regarding registration requirements. They have agreed to pay $850,000 to the commission in respect of this matter, $50,000 of which represents the cost of the investigation. All of the respondents have been permanently banned from trading in or purchasing securities, and from engaging in investor relations activities.

The BCSC wishes to thank the U.S. Securities and Exchange Commission, the RCMP, the Combined Forces Special Enforcement Unit - BC, and the Swiss Financial Market Supervisory Authority for their assistance throughout this investigation.

You may view the settlement agreement on our website www.bcsc.bc.ca by typing Bank Gutenberg AG, Gutenberg Management AG, Gutenberg Group AG, or 2014 BCSECCOM 375 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.

Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

  • A securities market that is fair and warrants public confidence
  • A dynamic and competitive securities industry that provides investment opportunities and access to capital

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

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