Great David Baines Article
Don Dyer, an unregistered stock salesman who is closely associated with controversial Langley promoter Rene Branconnier, illegally raised $836,658 from 83 investors in Canada and the United States, a B.C. Securities Commission hearing panel has ruled.
In a decision released Wednesday, the panel said Dyer, who lives in Richmond, persuaded the investors to “lend” the money to Pacific Ocean Resources Corp. from 2005 to 2009.
Pacific Ocean is a private B.C. company that was incorporated by Branconnier in 1983. Two decades later, Dyer later acquired the company, but Branconnier continued to be involved as a consultant and the sole signatory on its bank accounts.
As collateral for the loans, Pacific Ocean gave investors shares of Global 8 Environmental Technologies Inc.
Global 8 (formerly called Organic Recycling Technologies Inc.) is a Nevada registered company that trades on the OTC Bulletin Board in the United States.
Global 8 also had close ties to Branconnier. During the period in question, he was the controlling shareholder and the directors were close associates. He also had lucrative consulting contracts that the company, a perennial money-loser, could not afford to pay. Details are available here.
According to the hearing panel, the loans that the investors made to Pacific Ocean were ostensibly payable on demand, but if the company failed to repay the money, the only recourse for investors was to take the shares.
“While Pacific Ocean structured the transactions as loans, the scheme was transparently intended to facilitate Pacific Ocean’s distribution of Global 8 shares,” the panel found.
Under securities rules, nobody can sell shares without being registered as a broker and without filing a prospectus with the commission. Problem is, Dyer was not registered as a broker, and neither Pacific Ocean nor Global 8 had filed a prospectus.
The panel said Dyer claimed he sold the shares under exemptions from registration and prospectus requirements in the Securities Act.
The first was an exemption permitting the sale of shares to friends, family and business associates, but the hearing panel rejected this. It said in most cases Dyer had never met these investors.
The second was an exemption permitting the sale of shares to accredited investors (investors who meet minimum net worth and income thresholds). However, the panel said Dyer was not able to show that the investors met these minimums.
On this basis, the panel concluded that Dyer had illegally distributed Global 8 shares.
The panel also found that Dyer had telephoned investors from within B.C, which is illegal.
The panel – headed by BCSC commissioner Bradley Doney – directed lawyers for both sides to submit submissions on appropriate penalties.
Based on similar cases, penalties are likely to include a lengthy suspension from the B.C. securities market. And based on Dyer’s track record, the longer, the better.
dbaines@vancouversun.com