Richard Gozdek

White Rock man charged with breaching Securities Commission order

Richard Gozdek previously admitted to illegally selling securities

A White Rock man has been charged with three counts of contravening the Securities Act after allegedly breaching an order of the B.C. Securities Commission (BCSC).

Richard Gozdek, formerly of Abbotsford, was charged following an investigation by the BCSC’s criminal investigations branch.

In a settlement agreement with the BCSC in 2013, Gozdek admitted that he illegally sold securities in Armadillo – a Nevada corporation that claimed to own an oil lease in Oklahoma, according to a BCSC press release at the time.

The agency said that Gozdek had never been registered to sell securities in B.C., and Armadillo had never filed a prospectus, offering memorandum or exempt distribution report in B.C.

Between December 2010 and April 2011, Armadillo sold partnership agreements to at least 26 investors in B.C. for proceeds of almost $869,000, according to the BCSC.

ALSO SEE: B.C. man accused of misusing $450,000 of investors’ money

ALSO SEE: B.C. trader fined $400,000, banned from capital markets

The agency stated that Gozdek directly solicited people to invest in the partnership agreements, raising almost $551,000 from B.C. residents.

Gozdek, through his company Sterling Financial Group, was paid a fee of just over $40,000 for the sale of the partnership agreements.

Each month Armadillo would extract and sell the amount of oil an investor purchased to a refinery on the investor’s behalf.

According to the investor’s preference, the net proceeds would either then be used to acquire title to an additional quantity of oil, or would be forwarded to the investor in the form of a production payment.

As part of his settlement agreement in 2013, Gozdek agreed to pay approximately $65,000 to the BCSC, and was banned for five years from activities such as trading securities, engaging in investor relations, and acting as a consultant in the securities market.

It is now alleged that he failed to comply with that order in January 2015 in Abbotsford, Surrey and Vancouver.

Charges were laid last month in Abbotsford provincial court, and he made his first appearance on Dec. 20.

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