Alleged fraudsters trying to dodge BCSC bullet -Mackie Pakis trying to avoid examination of records. DEPORT THEM ALL!
BCSC interview could lead to U.S. trouble, says Tak
2017-12-22 10:30 ET - Street Wire
Also Street Wire (U-NEWG) Newgen Biohpharma Corp
by Mike Caswell
Burnaby's Harish Tak has asked the Supreme Court of British Columbia to deny a request from the B.C. Securities Commission for a court-ordered interview with him. He says that there is a real chance the BCSC will share his information with U.S. regulators. This could unfairly put him at risk of criminal prosecution in the U.S., he complains.
The request from Mr. Tak comes as part of a matter in which the BCSC is looking to ask him about the manipulation of an OTC Markets company, Newgen Biopharma Corp. The BCSC says that he has refused to answer any questions from investigators. As such, the regulator filed a court case in which it is seeking an order that would compel him to do so.
In his response to that case, filed on Dec. 15, Mr. Tak explains the reason he has not answered the BCSC's questions. He says that the BCSC investigation has to do with events that occurred on the U.S. markets. These events have attracted the attention of the U.S. Securities and Exchange Commission, which has an investigation under way, the response states. In market manipulation cases, the SEC routinely shares information with the U.S. Department of Justice. (The difference is significant because the Department of Justice can initiate criminal proceedings, with the prospect of jail time, while SEC cases are limited to fines and bans.)
As Mr. Tak sees things, any information that he gives the BCSC could be used against him in the U.S. According to the response, he sought assurances from the BCSC that his information would not be disseminated to U.S. law enforcement agencies. The BCSC refused to provide those assurances.
The response also sets out the legal basis for Mr. Tak's request, which is somewhat complicated. In the United States, a person compelled to provide an interview to a body such as a securities regulator can invoke the 5th Amendment and refuse to give any evidence that may be self-incriminatory. In Canada, those compelled to provide information to a securities regulator have no such option, says Mr. Tak. They do, however, have the comfort of knowing that whatever information they provide may not be used in domestic criminal proceedings, the response states.
The problem, as described by Mr. Tak, lies with cross-border investigations. He says that when a Canadian securities regulator compels somebody to provide testimony, there is no safeguard against a foreign criminal action. This violates immunity that such an individual would otherwise have in Canada. "It is [Mr. Tak's] position that compulsion in these circumstances violates his right to be free from self-incrimination as guaranteed by section 7 of the Charter of Rights and Freedoms," Mr. Tak's response reads.
For those reasons, he asks that the BCSC's request be denied. Alternatively, he is asking for a court order that would compel the BCSC to keep his information confidential.
The BCSC's request to interview Mr. Tak comes as part of a larger investigation into the manipulation of Newgen. The company, which trades on the OTC Markets, attracted a suspension from the SEC on March 28, 2017. The regulator said that there were questions about the identity of the company's major shareholder and about undisclosed control persons.
The halt came just days after a related search that BCSC staff carried out at the downtown Vancouver office of Mackie Research Capital. On that date, investigators attended the firm to seek records connected to Newgen. The BCSC did not say exactly what it was looking for, nor did it make any allegations against Mackie or its employees. The regulator did, however, identify the targets of that investigation. They include a group of Mackie employees: Shane Parhar, Zia Hirji and Afsheen Somji. Also named was Mr. Tak's brother, Karan.
(The four Mackie employees have since objected to the search, saying that BCSC enforcement staff failed to disclose their grounds for entering Mackie. The matter went before a BCSC panel, which agreed. On Sept. 6, 2017, the panel ordered investigators to hold off on examining the seized items until the validity of the search could be determined. The panel also directed enforcement staff to disclose the material they relied on to establish the grounds for the search.)
The attempt to interview Mr. Tak arose from the Mackie search. In a petition filed at the Vancouver courthouse on Sept. 20, 2017, the BCSC said that Mr. Tak had an account at Mackie and that he traded Newgen through that account. The petition specifically stated that Mr. Tak is not a target of the investigation. The BCSC claimed that it was merely interested in determining if there was any illegal activity by Mackie.
So far the investigation by the BCSC has not resulted in any charges or proceedings against Mackie, its employees, Mr. Tak or anybody else. Vancouver lawyer Ronald Pelletier represents Mr. Tak.