Vancouver stockbroker penalized for 'Bridgemark Group' trades.

Vancouver stockbroker penalized for ‘Bridgemark Group’ trades.

Research Capital Corporation’s Tiffany Sweeney failed to fulfill her fiduciary duties, according to the Investment Industry Regulatory Organization of Canada.

A Vancouver stockbroker has admitted he failed in his duties as a watchdog while facilitating trades at companies linked to individuals facing insider trading charges.

Tiffany Sweeney of Research Capital Corporation (formerly known as Mackie Research Capital Corporation) reached a settlement with the Investment Industry Regulatory Organization of Canada (IIROC), admitting that she “failed to fulfill her duties as a gatekeeper” and “communicated with her clients using unapproved third parties.” party communication application” in violation of IIROC rules.

Sweeney’s actions raise the curtain on the integral role that regulated stockbrokers can play in business deals.

According to the settlement, Sweeney brokered millions of dollars worth of deals in 2018 at companies that have since either pleaded guilty or face charges of making false statements in connection with questionable consulting arrangements.

The trades that Sweeney brokered involved shares of companies known to work with consultants belonging to what is known on Vancouver’s Howe Street as the Bridgemark Group.

The IIROC ruling shows that Sweeney facilitated deals with Affinor Growers Inc., BLOK Technologies Inc., Preveceutical Medical Inc., New Point Exploration (now Bam Bam Resources Corp.), Speakeasy Cannabis Club and Beleave Inc., among others.

Affinor, BLOK, Bam Bam and Preveceutical are facing hearings before the BC Securities Commission for making false statements to the public, while Speakeasy and Beleave have already admitted making false statements in breach of the BC Securities Act in settlements.

The companies — all of which had no revenue and questionable prospects for commercial interest — raised or allegedly raised millions of dollars in private placement purchases by Bridgemark Group consultants, only to return most of it to the consultants through consulting contracts, despite the fact that, according to the commission, little or no consulting work has been done to warrant these fees. The Commission argued that none of these transactions were disclosed, thus distorting the true purpose of the private placement.

In April 2021, the commission dropped previous allegations of misconduct against numerous Bridgemark Group consultants and their respective companies. The Amended Notice of Hearing now includes only four of those consultants who are now alleged to have engaged in insider trading and/or acted themselves contrary to the public interest of the directors.

Justin Edgar Liu, Cameron Paddock, Robert John Lawrence and Anthony Jackson are among respondents allegedly involved in a business arrangement involving nine companies — including those named in Sweeney’s IIROC settlement — that raised $50.8 million through 12 private placements . Jackson is the sole director of BridgeMark Financial Corp. and his accounting firm Jackson and Company Professional Corp. – both located at 800 – 1199 West Hastings.

Sweeney’s IIROC settlement identifies the companies it helped facilitate the deals but does not name any of the consultants.

“From December 2017 to October 2018, Sweeney facilitated activity on seven accounts for five different clients, which generated a number of indicators or red flags that suggested the accounts may have been involved in activity that was suspicious.

“Many of the accounts were linked to AJ, who was the sole director of B Financial Corp. (“B Financial”) and J & Company Professional Corp. (“J & Company”). Sweeney was the registered agent for AJ’s account and knew that AJ and many of the individuals who were authorized to trade on behalf of the seven accounts knew each other.’

The agreement states that “B Financial had at all material times its registered office at 1199 West Hastings St., Vancouver, BC”

Red flags raised by Mackie’s compliance department included how “account holders were consultants to some of the same issuers” and how “stocks were sold before or shortly after being deposited into the accounts, often at a loss.”

“The compliance department’s notice and investigation should have prompted Sweeney to conduct further investigation to ensure that the account activity was conducted for legitimate purposes,” the agreement noted.

Sweeney, who first worked for PI Financial Corp. at the time of her hearing, also used WhatsApp Messenger and Signal Messenger to communicate with account owners, thereby evading monitoring requirements.

IIROC investigators found that account activity was inconsistent with net liquid asset values ​​on New Client Application Forms (NCAFs).

For example, “The NCAF for the JL Research Account reported that JL had estimated net liquid assets of $5,000,000,” while “Between May 2018 and September 2018, $11,000,000 was withdrawn from the JL Research Account.”

Sweeney was suspended as a registered agent for one month, must pay a $50,000 fine and pay back $28,806 in commissions. He must also pay costs of $15,000.

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