A company in the Bridgemark case has admitted to illegal insider trading and received a $200,000 fine plus a limited three-year ban on purchasing certain stocks.
Robert John Lawrence, a Vancouver resident who has no prior record of capital markets misconduct, is said to have cooperated with B.C. Securities Commission executive director Peter Brady and hence avoided a more costly hearing, according to a settlement agreement published Jan. 13.
In addition to paying a $200,000 fine, Lawrence and his company Tavistock Capital Corp. are both banned for three years “from purchasing, any securities or exchange contracts of any reporting issuer with whom it is in a special relationship.”
On Nov. 26, 2018, the commission issued a hearing notice against a collection of close to three dozen “purported consultants” and their respective firms, including Tavistock and Lawrence, from the Bridgemark case.
The commission alleged those in the case conspired to buy shares in private placements of 11 junior B.C. companies. They then allegedly received lucrative pre-paid consulting contracts only to quickly sell the shares back to retail investors on the open market and not perform any substantial work to improve the companies.
In April 2021, the commission discharged most of the consultants from the original hearing notice, leaving just four key alleged conspirators, including Tavistock and Lawrence, to face administrative charges of illegal insider trading and conduct contrary to the public interest in an amended hearing notice.
The commission stated there was collectively $50.8 million worth of shares purchased, which received $42.9 million in consultant fees, via nine of the companies.
Three of the companies involved in the arrangements have already admitted to issuing misrepresentations to investors and four face a hearing this year for likewise administrative charges.
As admitted in Lawrence's settlement agreement, Lawrence and Tavistock “entered into consulting agreements with [a company] pursuant to which they received prepaid consulting fees.”
The company paid the fees with money raised in private placements from the consultants themselves. In total, the company (anonymized by the commission) raised $4 million and spent $3.3 million on such fees, via the four alleged illegal inside traders, including Lawrence.
These transactions were considered material information; however, this information was never disclosed publicly (and in many cases, companies involved with the Bridgemark case made out to retail investors, via press releases, that they had raised millions of dollars to better their operations, when in fact the money was for a swap of cash and shares between the purported consultants).
Thereafter, while in a “special relationship” with the company, “Tavistock entered into transactions involving securities of [the company] with knowledge of the Material Information and at a time when the Material Information had not been generally disclosed.”
“Tavistock purchased shares of [the company] for $625,000 as part of the Private Placement (the Shares), and sold the Shares in the Transactions for $285,418. At the time of the Transactions, neither Tavistock nor Lawrence appreciated that the Material Information constituted a material fact or change.”
Although Lawrence and others (allegedly) at times traded their shares for losses, the consultant fees more than made up for them, trading and investigation records show.
However, the settlement does not specifically state the value of Lawrence or Tavistock’s consulting fees. The settlement also makes no mention of conduct contrary to the public interest.
Meanwhile, West Vancouver residents (and their respective companies) Anthony Kevin Jackson (BridgeMark Financial Corp. and Jackson & Company Professional Corp.), Justin Edgar Liu (Lukor Capital Corp. and Asiatic Management Consultants Ltd.) and Cameron Robert Paddock (Rockshore Advisors Ltd.) are alleged, in an amended hearing notice, to have conducted themselves contrary to the public interest as company directors and performed illegal insider trading.
Editor's note: This story was updated to note what the settlement doesn't state.