Group accused of major stock scam

Five individuals are being investigated for allegedly inflating stock and making $7 million on its sale to people down on their luck

Group accused of major stock scam

The provincial securities regulator is alleging five people manipulated share prices of a company and profited by $7 million in the scheme.

The B.C. Securities Commission (BCSC) says Thalbinder Singh Poonian, Shailu Sharon Poonian, Robert Joseph Leyk, Manjit Singh Sihota and Perminder Sihota collaborated in the price manipulation, sending the company’s trading value to $2 a share.

The company is OSE Corp, an Ontario company, whose shares are traded on the TSX-V and has a head office in Delta.

BCSC staff contends that the individuals named in the notice, as well as certain relatives, friends and associates of Thalbinder and Sharon Poonian, acquired a dominant share position in OSE through a private placement. By trading through brokerage accounts held by them, the group pushed the prices upward from 10 cents to $2.

Then, it’s alleged, the group sold the shares to unsuspecting clients of Phoenix Credit Risk Management Consulting, a Richmond Hill firm providing debt management services.

The notion that people so down on their luck were preyed upon shocked securities investigators.

“The investigators see a lot of really nasty behaviour,” said BCSC spokesman Richard Gilhooley. “They’re calling this out as one of the more egregious cases they’ve ever seen.

“These people were already in desperate financial straits, were going to a debt management consultant to get some help to sort themselves out,” Gilhooley said. Those people bought the $2 stock that was just about worthless. It’s trading now for eight cents.

The BCSC has three options for investigation, including regulatory, administrative and criminal.

“This is definitely going to be a regulatory investigation,” Gilhooley said. “What the outcome of a regulatory investigation tends to be market bans and fines.”

It also gives the commission the authority to recover as much as possible for the people who lost their investment.

@diakiw