Legal victories bring B.C. regulator closer to recovering $40M in fines

This May 8, 2018, photo shows the Nevada Supreme Court in Carson City, Nev. (AP / Scott Sonner)

British Columbia's investment regulator says it has won two court victories in its pursuit of more than $40 million in unpaid financial sanctions it imposed in two separate cases.

The first win for the British Columbia Securities Commission came on March 18 in Nevada, where that state's Supreme Court denied a former B.C. resident's petition for a rehearing.

Michael Lathigee owes millions to the BCSC after a panel found in 2014 that he and another man, Earle Douglas Pasquill, had fraudulently raised millions of dollars from investors without telling them the financial condition of the companies he controlled.

The commission imposed a $15-million administrative penalty against him and permanently banned him from securities trading in B.C. It also ordered him to pay a $21.7-million "disgorgement," representing the amount of money he and Pasquill obtained through their misconduct. 

In December, a Nevada state judge recognized the BCSC's order, giving the commission the right to pursue Lathigee's assets in the state. The state Supreme Court's denial of Lathigee's petition means BCSC can continue its pursuit.

The other recent legal victory for the BCSC came closer to home, in the form of a B.C. Supreme Court ruling that Thalbinder Singh Poonian and Shailu Poonian "will never be discharged from their debts to the BCSC by bankruptcy," according to a news release from the commission.

The pair owes the BCSC $13.5 million in administrative penalties and $5.5 million in repayment of money they made through their misconduct. So far, they have not paid any portion of those sanctions, according to the BCSC.

The fines stem from a 2015 decision in which the commission found that the two had inflated the share price of an Ontario company by back-and-forth trading among themselves, relatives, friends and acquaintances, eventually making $7 million from their market manipulation by selling the shares to unsuspecting buyers.

The decision of the B.C. Supreme Court reads, in part, “the Poonians’ actions were morally unacceptable and harmful to society, such that they should not be rewarded with a release of those debts,” according to the BCSC.

“Both of these cases show the lengths to which wrongdoers will go to avoid paying the debts they owe the commission,” said Peter Brady, the BCSC’s executive director, in the commission's release.

“We work tirelessly to collect those financial sanctions so we can return money to investors and deter others from breaking securities laws," he continued. "We’re pleased with these decisions because they mean we can continue with our collections efforts.”

Among the tools the BCSC can use in its efforts is a new power that allows the commission to block people who owe it money from obtaining or renewing driver's licences or registering vehicles. That power came into force on Monday.