A North Vancouver man previously fined for stock manipulation has been found guilty of breaking securities regulations again through unreported insider trading.
A B.C. Securities Commission panel found Mark Aaron McLeary failed to report his trading in shares of both Silver Sun Resource Corp. and Newton Gold Corp. when he was the chief executive officer and director of those publicly traded companies.
McLeary bought and sold shares in the companies both through Canadian trading accounts and a Panamanian account that he set up specifically to conceal his trading activity, according to the securities commission.
McLeary hired a Panamanian law company to set up a company in 2010, then opened a trading account under that corporation’s name. McLeary’s own name was never attached to the trading account, although he confirmed to securities commission staff that he had trading authority over it.
McLeary also acknowledged in a hearing into the case that he paid substantially more to trade through the Panamanian account than he would have through a Canadian account.
The regulator found McLeary had made between 105 and 125 unreported trades. While he was secretly trading Silver Sun shares through the offshore account in 2011, McLeary was issuing press releases about the company’s business activities at the same time, said the commission.
The panel added McLeary set up the Panamanian trading account at a time when he knew he was under investigation by the commission on another securities matter.
Earlier this year, McLeary was banned from capital markets and fined almost $900,000 by the securities commission after being found guilty of deliberately manipulating the share price of a mineral company, Sungro Minerals, along with two U.S. citizens, in 2009.
Sungro was traded on the United States Over-the-Counter Bulletin Board penny stock market, which is considered much riskier than trading on regular stock markets because of the comparative ease with which very small share prices can be manipulated with a small amount of either hype or negative commentary.
The securities panel found that at the start of the trading period, Sungro had only $299 in assets. Despite there being “no real change in its prospects and no news that would justify significant increases,” over a 13-day period shares increased in value from 45 cents to a high of $4.75 on a high volume of trading.
The commission found the three men were involved in heavily promoting the shares on an online investors’ message board and on an investor website.
As of November, that fine – including more than $91,000 made as a result of the misconduct, plus an $800,000 penalty – remained unpaid.
No penalty has been determined yet for failing to report the insider trading.
