The project director of a proposed ski resort in the area has been fined $2 million by the B.C. Securities Commission.
In a ruling released last Friday, the commission said Ronald Stephen McHaffie fraudulently enticed 30 people to invest in BigFoot Recreation & Ski Area Ltd. and raised about $642,960 through the sale of shares in BigFoot between August 2007 and January 2012.
However, the company, which was incorporated in 2003 to develop the resort, never filed a prospectus in B.C. and McHaffie has never been registered to sell securities in B.C.
“The panel found that, through the sale of shares in BigFoot, McHaffie committed a fraud,” the ruling said.
“In that regard, McHaffie made false statements to entice investors, such as telling them that their investment would be used for expenses related to getting BigFoot publicly listed, and that construction or completion of the ski resort was imminent.”
Instead, according to the ruling, McHaffie used investor funds to pay for personal expenses, including gas, restaurants, groceries and retail purchases, not for expenditures related to taking BigFoot public.
In addition, although BigFoot’s ski resort proposal was rejected by the provincial government in September 2010, McHaffie continued to raise a total of $111,070 from investors after that date. The commission found that Bigfoot’s distribution of shares to 27 of the 30 investors for proceeds of $621,960 contravened the prospectus requirements in the Securities Act. McHaffie also contravened the Act because, as a director of BigFoot, he authorized, permitted and acquiesced in the company’s contravention.
McHaffie and BigFoot have been permanently prohibited from trading or purchasing securities or exchange contracts, from acting as a registrant or promoter, from engaging in investor relations activities, and from acting in a management or consultative capacity in connection with the securities market. McHaffie is also permanently prohibited from acting as a director or officer of any issuer or registrant.
In addition to the $2 million fine, the commission has ordered McHaffie to pay back the $642,960 he raised from investors.