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B.C. man facing fraud charges in U.S. fined $40K for illegal trades

Aarif Jamani is barred from B.C.'s capital markets for four years after conceding he violated a cease trade order; in a related matter Jamani faces securities fraud charges in a New York court
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Fined $40,000 by Canadian officials for illegal trading, Aarif Jamani of Burnaby also faces allegations from the U.S. Securities and Exchange Commission (SEC) he committed fraud. Getty/Javier Ghersi

Burnaby resident and long-time Vancouver stock promoter Aarif Jamani has reached a $40,000 settlement with the B.C. Securities Commission after admitting he broke a cease trade order of a company American officials allege was a vehicle of a $5-million fraud scheme.

Jamani faces civil charges of securities fraud and unregistered securities trading in a New York federal court and had been scheduled to appear before an administrative hearing panel with the B.C. Securities Commission (BCSC) until admitting he broke the cease trade order.

BCSC executive director Peter Brady also imposed a four-year ban on Jamani from participating in the public markets, outside of personal trading via a registered broker.

Jamani admitted to the BCSC he used two numbered companies he controlled — 0985358 B.C. Ltd. and 1207124 B.C. Ltd. — to buy and sell 18.7 million shares of a small California-based public company called County Line Energy Inc., registered in Nevada and whose principal Canadian regulator is the BCSC.

County Line had a BCSC cease trade order placed on it in 2013 but between 2018 and 2021 the firm issued US$96,850 worth of shares to Jamani’s companies.

For its part in the violation, County Line agreed to pay a $10,000 penalty to the BCSC.

According to the settlement, Jamani was warned by BCSC staff that his conduct was in breach of the order; however, he continued with transactions that ultimately proved very profitable, according to allegations from the U.S. Securities and Exchange Commission (SEC).

The BCSC executive director did not indicate that the misconduct resulted in any loss for investors.

However, south of the border, officials claim Jamani and two co-conspirators orchestrated a “microcap fraud scheme targeting retail investors.”

The Jan. 12 SEC complaint alleges how, starting in 2017, the trio orchestrated the "pump and dump" by first establishing “handpicked figureheads” into senior roles at County Line, a de facto penny stock shell company that traded sparsely, if at all, while presenting itself as a hydroponic manufacturer.

By the fall of 2018, “a longtime associate of Jamani’s was nominally County Line’s Chief Executive Officer and Director,” the SEC stated.

With their executive associates in place at County Line, officials allege the trio amassed millions of cheap shares and then embarked on a plan to create the false appearance of investor interest by sending out promotional material and trading shares among one another.

The SEC is demanding a jury trial and seeking market participation bans against Jamani, repayment orders and monetary penalties. Jamani has not responded to the charges in court.

gwood@glaciermedia.ca