The securities regulator in British Columbia has found that three individuals and two mortgage investment firms committed fraud.
BCSC said that marketing materials provided by Donald Bruce Edward Wilson, David Scott Wright, Patrick K. Prinster and DominionGrand II Mortgage Investment Corporation and DominionGrand Investment Fund Inc. would have led a reasonable person to believe their funds would be invested in mortgages secured by real estate.
However, none of the funds were used for that purpose and were instead used for startup costs and other purposes by related companies.
The British Columbia Securities Commission said that, especially given the men’s experience in the real estate industry, they should have known that diverting investors' funds from their intended investment in secured mortgages into unsecured investments in related parties would result in both the risk of loss and actual loss to investors.
Wilson, Wright, Prinster and DominionGrand II Mortgage Investment Corporation were found to have committed fraud with respect to 19 investments for $610,134; Wright, Prinster and DominionGrand Investment Fund Inc. were found to have committed fraud with respect to 21 investors for $506,693.
The panel will impose sanctions after considering submissions from BCSC staff and the respondents.
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